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 Utah Code 70A-8-101
Certificated security: means a security that is represented by a certificate. See Utah Code 70A-8-101
Financial asset: except as otherwise provided in Section 70A-8-102, 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 that securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this chapter. See Utah Code 70A-8-101
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Security: except as otherwise provided in Section 70A-8-102, 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 that:
(i)
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;
(ii)
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
(iii)
(A)
is, or is of a type, dealt in or traded on securities exchanges or securities markets; or
(B)
is a medium for investment and by its terms expressly provides that it is a security governed by this chapter. See Utah Code 70A-8-101
Security certificate: means a certificate representing a security. See Utah Code 70A-8-101
Statute: A law passed by a legislature.
Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
the person is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim; or
(c)
the person has a duty, imposed by statute or regulation, to investigate whether an adverse claim exists, and the investigation so required would establish the existence of the adverse claim.
(2)
Having knowledge that a financial asset or interest therein is or has been transferred by a representative imposes no duty of inquiry into the rightfulness of a transaction and is not notice of an adverse claim. However, a person who knows that a representative has transferred a financial asset or interest therein in a transaction that is, or whose proceeds are being used, for the individual benefit of the representative or otherwise in breach of duty has notice of an adverse claim.
(3)
An act or event that creates a right to immediate performance of the principal obligation represented by a security certificate or sets a date on or after which the certificate is to be presented or surrendered for redemption or exchange does not itself constitute notice of an adverse claim except in the case of a transfer more than:
(a)
one year after a date set for presentment or surrender for redemption or exchange; or
(b)
six months after a date set for payment of money against presentation or surrender of the certificate, if money was available for payment on that date.
(4)
A purchaser of a certificated security has notice of an adverse claim if the security certificate:
(a)
whether in bearer or registered form, has been indorsed “for collection” or “for surrender” or for some other purpose not involving transfer; or
(b)
is in bearer form and has on it an unambiguous statement that it is the property of a person other than the transferor, but the mere writing of a name on the certificate is not such a statement.
