Despite the detailed listing of security instruments in the 1933 ...

[big1devin]

Despite the detailed listing of security instruments in the 1933 Securities Act, the Supreme Court has also given a broad definition to what is covered by the Act.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Forged Signatures. Cynthia Stafford worked as an administrative professional at Gerber & Gerber, P.C. (professional corporation), a law firm, for more than two years. During that time, she stole ten checks payable to Gerber & Gerber (G&G), which she indorsed in blank by forging one of the attorney's signatures. She then indorsed the forged checks in her name and deposited them in her account at Regions Bank. Over the same period, G&G deposited in its accounts at Regions Bank thousands of checks amounting to 300 million to 400 million. Each G&G check was indorsed with a rubber stamp for deposit into the G&G account. The thefts were made possible in part because G&G kept unindorsed checks in an open file accessible to all employees and Stafford was sometimes the person assigned to stamp the checks. When the thefts were discovered, G&G filed a suit in a Georgia state court against Regions Bank to recover the stolen funds, alleging in part negligence. Regions Bank filed a motion for summary judgment. What principles apply to attribute liability between these parties? How should the court rule on the bank's motion? Explain.

[babybsemail]

Answer to Question 1

TRUE

Answer to Question 2

Forged signatures
The court found that the parties' comparative negligence precluded summary judgment as to the forged checks. Both parties appealed to a state intermediate appellate court, arguing that each failed to exercise the appropriate degree of care. The court upheld the lower court's decision. The appellate court explained that when a payee act negligently in failing to prevent the forgery of its endorsement, a jury should decide whether that negligence substantially contributed to the making of the forgerybut only if the    bank in good faith paid the instrument or took it for value or for collection. Thus, the focus was on Region Bank's good faith (its honesty in fact and its observance of reasonable commercial standards of fair dealing) in regard to its accepting the forged checks as deposits in Stafford's account. The court reasoned that ince Regions Bank also serviced G&G's business accounts and therefore knew that G&G normally placed a restrictive endorsement stamp on checks made payable to G&G, Regions Bank was on heightened notice of the irregularity of the en-dorsements on the checks deposited by Stafford and therefore could be held to have dealt with G&G unfairly by not making inquiry into the legitimacy of those endorsements. Thus, whether Regions Bank acted in good faith in this matter is a question to be resolved by the jury, which means that it cannot be resolved on summary judgment.

[big1devin]

Thank you

[babybsemail]

No problemo