Author Question: The 1933 Securities Act primarily concerns issuing of new securities, not the regulation of existing ... (Read 92 times)

ereecah · **on:** Jun 24, 2018

The 1933 Securities Act primarily concerns issuing of new securities, not the regulation of existing securities.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Consumer versus Commercial Transfers. Shawmut Worcester County Bank, a Massachusetts bank, transferred 10,000 to First American Bank & Trust of Palm Beach, Florida, through Fedwire. Shawmut's payment order stated that the beneficiary of the transfer was Fernando Degan and that First American should credit account number 100 205 001 633. It turned out that the First American account under that number was held jointly by Degan and Joseph Merle. When Shawmut discovered its error 106 days after the mistaken transfer, it credited the account of its customer who had requested the transfer with the 10,000 and then asked First American to reverse the transfer. First American asked Merle, its customer, if he would authorize the reversal. Merle refused. Accordingly, First American told Shawmut it would not reverse the transfer. Shawmut then sued First American to recover the 10,000, alleging, among other claims, that the transaction fell under the EFTA, which prescribes specific requirements that must be followed in the event of error in an electronic fund transfer. Is Shawmut a consumer within the meaning of the EFTA? How should the court rule?

ghepp · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

TRUE

Answer to Question 2

Consumer versus commercial transfers
The court determined that the EFTA was primarily created for the benefit of consumers to pro-vide them with legal protection against financial institutions in electronic funds transfers. Be-cause this dispute was between two financial institutions (who did not offer any evidence that First American directly or indirectly held an account belonging to a consumer) over a garden-variety wire transfer not covered by the EFTA, the court granted First American's motion for summary judgment.