Author Question: The 1933 Securities Act is supposed to prevent fraud and misrepresentation in the sale of new ... (Read 78 times)

vicotolentino · **on:** Jun 24, 2018

The 1933 Securities Act is supposed to prevent fraud and misrepresentation in the sale of new securities.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Wire Transfers. Dr. As'ad M. Masri and his wife borrowed 150,000 from First Virginia Bank-Colonial (FVBC). Masri then signed a wire transfer request directing FVBC to transfer the funds to the Amro Bank in Amsterdam. The request also stated that the funds were to be deposited to the Lenex Corp's account in that bank. FVBC transferred the funds to the Bank of Nova Scotia, an intermediary bank, and sent disbursal instructions directly to Amro. The following day, the funds were credited to the Lenex account at the Amro Bank. They were withdrawn, however, by someone other than the person intended by Masri to withdraw them. When the Masris later defaulted on the loan, FVBC sought full repayment. The Masris claimed that FVBC had breached the wire transfer agreement. Did FVBC breach the transfer agreement? Where did FVBC's responsibility end? Discuss fully.

Harbringer · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

TRUE

Answer to Question 2

Wire transfers
The trial court ruled in favor of Masri, but on appeal, this ruling was reversed. The appellate court pointed out that Masri signed the wire transfer request, which read, FVBC shall not be responsible for non-performance or loss or damage by reason of or resulting from: errors, de-lays, omissions or defaults in transmission or receipt of any communication; errors, delays, omissions or defaults of our correspondents, their agents or sub-agents; . . . or for any cause beyond our control, all of which risks are assumed by you. . . . No refund shall be made by us, if because of erroneous identification, payment has been made to one other than the Benefi-ciary. The court noted that Masri was a physician and psychiatrist with the capacity to under-stand agreements that he signed. While Masri testified that he did not read the language on the reverse side of the wire transfer agreement, he is nevertheless bound by that language. In the absence of fraud, duress, or mutual mistake, an individual having the capacity to understand a written document, who signs that document without reading it, is bound by his signature. The court acknowledged that Lenex was the Beneficiary. The funds reached Lenex's account. The court reasoned that the disposition of those funds after they reached Lenex's account is not germane to this inquiry. FVBC had agreed only to transfer the funds to Amro. nder the contract, Masri had waived any claim against FVBC for nonperformance due to causes beyond FVBC's control. Plainly, the disbursement of the funds after they had reached Lenex's account was a factor beyond FVBC's control. Thus, the evidence is insufficient to establish that FVBC breached its contract with Masri.