(a)  No person who participates in the acquisition, disposition, assignment, or transfer of a security by or to a fiduciary, including a person who guarantees the signature of the fiduciary, is liable for participation in any breach of fiduciary duty by reason of failure to inquire whether the transaction involves a breach, unless it is shown that the person acted with actual knowledge that the proceeds of the transaction were being or were to be used wrongfully for the individual benefit of the fiduciary or that the transaction was otherwise in breach of duty.

Terms Used In Rhode Island General Laws 18-11-8

  • Assignment: includes any written stock power, bond power, bill of sale, deed, declaration of trust, or other instrument of transfer. See Rhode Island General Laws 18-11-2
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: means a private or public corporation, association, or trust issuing a security. See Rhode Island General Laws 18-11-2
  • Fiduciary: A trustee, executor, or administrator.
  • Fiduciary: means an executor, administrator, trustee, guardian, committee, conservator, curator, tutor, custodian, or nominee. See Rhode Island General Laws 18-11-2
  • Person: includes an individual, a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, two (2) or more persons having a joint or common interest, or any other legal or commercial entity. See Rhode Island General Laws 18-11-2
  • Security: includes any share of stock, bond, debenture, note, or other security issued by a corporation that is registered as to ownership on the books of the corporation. See Rhode Island General Laws 18-11-2
  • Transfer: means a change on the books of a corporation in the registered ownership of a security. See Rhode Island General Laws 18-11-2
  • Transfer agent: means a person employed or authorized by a corporation to transfer securities issued by the corporation. See Rhode Island General Laws 18-11-2

(b)  If a corporation or transfer agent makes a transfer pursuant to an assignment by a fiduciary, a person who guaranteed the signature of the fiduciary is not liable on the guarantee to any person to whom the corporation or transfer agent, by reason of this chapter, incurs no liability.

(c)  This section does not impose any liability upon the corporation or its transfer agent.

History of Section.
P.L. 1959, ch. 85, § 8.