§ 34.1-8-202 — Issuer's responsibility and defenses; notice of defect or defense

Wyoming § 34.1-8-202

• Jurisdiction: Wyoming
• Title 34.1: Uniform Commercial Code
• Art. 8: INVESTMENT SECURITIES

Text

(a) Even against a purchaser for value and without notice,
the terms of a certificated security include terms stated on the
certificate and terms made part of the security by reference on
the certificate to another instrument, indenture, or document or
to a constitution, statute, ordinance, rule, regulation, order,
or the like, to the extent the terms referred to do not conflict
with terms stated on the certificate. A reference under this
subsection does not of itself charge a purchaser for value with
notice of a defect going to the validity of the security, even
if the certificate expressly states that a person accepting it
admits notice. The terms of an uncertificated security include
those stated in any instrument, indenture, or document or in a
constitution, statute, ordinance, rule, regulation, order, or
the like, pursuant to which the security is issued.
(b) The following rules apply if an issuer asserts that a
security is not valid:
(i) A security other than one issued by a government
or governmental subdivision, agency, or instrumentality, even
though issued with a defect going to its validity, is valid in
the hands of a purchaser for value and without notice of the
particular defect unless the defect involves a violation of a
constitutional provision. In that case, the security is valid in
the hands of a purchaser for value and without notice of the
defect, other than one who takes by original issue;
(ii) Paragraph (i) of this subsection applies to an
issuer that is a government or governmental subdivision, agency,
or instrumentality only if there has been substantial compliance
with the legal requirements governing the issue or the issuer
has received a substantial consideration for the issue as a
whole or for the particular security and a stated purpose of the
issue is one for which the issuer has power to borrow money or
issue the security.
(c) Except as otherwise provided in W.S. 34.1-8-205, lack
of genuineness of a certificated security is a complete defense,
even against a purchaser for value and without notice.
(d) All other defenses of the issuer of a security,
including nondelivery and conditional delivery of a certificated
security, are ineffective against a purchaser for value who has
taken the certificated security without notice of the particular
defense.
(e) This section does not affect the right of a party to
cancel a contract for a security "when, as and if issued" or
"when distributed" in the event of a material change in the
character of the security that is the subject of the contract or
in the plan or arrangement pursuant to which the security is to
be issued or distributed.
(f) If a security is held by a securities intermediary
against whom an entitlement holder has a security entitlement
with respect to the security, the issuer may not assert any
defense that the issuer could not assert if the entitlement
holder held the security directly.