2006 New York Code - Effect Of Guaranteeing Signature, Indorsement, Or Instruction.

 
  Section 8--306. Effect   of   Guaranteeing  Signature,  Indorsement,  or
                    Instruction.
    (a) A person who guarantees a signature of an indorser of  a  security
  certificate warrants that at the time of signing:
         (1) the signature was genuine;
         (2) the  signer  was  an appropriate person to indorse, or if the
             signature is by an agent, the agent had actual  authority  to
             act on behalf of the appropriate person; and
         (3) the signer had legal capacity to sign.
    (b) A  person  who  guarantees  a  signature  of  the originator of an
  instruction warrants that at the time of signing:
         (1) the signature was genuine;
         (2) the  signer  was  an  appropriate  person  to  originate  the
             instruction,  or  if  the signature is by an agent, the agent
             had actual authority to act  on  behalf  of  the  appropriate
             person,  if  the  person  specified in the instruction as the
             registered owner was, in fact, the registered  owner,  as  to
             which  fact the signature guarantor does not make a warranty;
             and
         (3) the signer had legal capacity to sign.
    (c) A person who specially guarantees the signature of  an  originator
  of  an  instruction  makes the warranties of a signature guarantor under
  subsection (b) and also warrants that at the  time  the  instruction  is
  presented to the issuer:
         (1) the  person  specified  in  the instruction as the registered
             owner of the uncertificated security will be  the  registered
             owner; and
         (2) the  transfer of the uncertificated security requested in the
             instruction will be registered by the issuer  free  from  all
             liens,  security  interests,  restrictions,  and claims other
             than those specified in the instruction.
    (d) A guarantor under subsections (a) and (b) or a  special  guarantor
  under  subsection (c) does not otherwise warrant the rightfulness of the
  transfer.
    (e) A person who guarantees an indorsement of a  security  certificate
  makes  the  warranties of a signature guarantor under subsection (a) and
  also warrants the rightfulness of the transfer in all respects.
    (f) A person who guarantees an instruction requesting the transfer  of
  an  uncertificated  security makes the warranties of a special signature
  guarantor under subsection (c) and also warrants the rightfulness of the
  transfer in all respects.
    (g) An issuer may not require  a  special  guaranty  of  signature,  a
  guaranty  of indorsement, or a guaranty of instruction as a condition to
  registration of transfer.
    (h) The warranties under this section are made to a person  taking  or
  dealing with the security in reliance on the guaranty, and the guarantor
  is  liable  to  the  person  for  loss resulting from their breach.   An
  indorser or originator of an instruction whose  signature,  indorsement,
  or instruction has been guaranteed is liable to a guarantor for any loss
  suffered by the guarantor as a result of breach of the warranties of the
  guarantor.