A securities intermediary that has transferred a financial asset pursuant to an effective entitlement order, or a broker or other agent or bailee that has dealt with a financial asset at the direction of its customer or principal, is not liable to a person having an adverse claim to the financial asset, unless the securities intermediary, broker or other agent or bailee:

Terms Used In Arizona Laws 47-8115

  • Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
  • Adverse claim: means a claim that a claimant has a property interest in a financial asset and that it is a violation of the rights of the claimant for another person to hold, transfer or deal with the financial asset. See Arizona Laws 47-8102
  • Broker: means a person defined as a broker or dealer under the federal securities laws, but without excluding a bank acting in that capacity. See Arizona Laws 47-8102
  • Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
  • Financial asset: except as otherwise provided in section 47-8103, means:

    (a) A security;

    (b) An obligation of a person or a share, participation or other interest in a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or

    (c) Any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this chapter. See Arizona Laws 47-8102

  • Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
  • Process: means a citation, writ or summons issued in the course of judicial proceedings. See Arizona Laws 1-215
  • Securities intermediary: means :

    (a) A clearing corporation; or

    (b) A person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. See Arizona Laws 47-8102

  • Security: except as otherwise provided in section 47-8103, means an obligation of an issuer or a share, participation or other interest in an issuer or in property or an enterprise of an issuer:

    (a) Which is represented by a security certificate in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer;

    (b) Which is one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations; and

    (c) Which:

    (i) Is, or is of a type, dealt in or traded on securities exchanges or securities markets; or

    (ii) Is a medium for investment and by its terms expressly provides that it is a security governed by this chapter. See Arizona Laws 47-8102

1. Took the action after it had been served with an injunction, restraining order or other legal process enjoining it from doing so, issued by a court of competent jurisdiction, and had a reasonable opportunity to act on the injunction, restraining order or other legal process;

2. Acted in collusion with the wrongdoer in violating the rights of the adverse claimant; or

3. In the case of a security certificate that has been stolen, acted with notice of the adverse claim.

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