24.40.020 "Bona Fide Purchaser"; "Adverse Claim"; Title Acquired by Bona Fide Purchaser

(a) A "bona fide purchaser" is a purchaser for value in good faith and without notice of any adverse claim:

(1) who takes delivery of a certificated security in bearer form or in registered form, issued or indorsed to him or her or in blank;

(2) to whom the transfer, pledge or release of an uncertificated security is registered on the books of the issuer; or

(3) to whom a security is transferred under the provisions of paragraph (3), (4), (i), or (g) of Section 24.41.030.

(b) "Adverse claim" includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in the security.

(c) A bona fide purchaser in addition to acquiring the rights of a purchaser (Section 24.40.010) also acquires his or her interest in the security free of any adverse claim.

(d) Notwithstanding Section 24.40.010(a), the transferee of a particular certificated security who has been a party to any fraud or illegality affecting the security, or who as a prior holder of that certificated security had notice of an adverse claim, cannot improve his or her position by taking from a bona fide purchaser.