Cybercrime in the Securities Market: Is U.C.C. Article 8 Prepared?
90 N.C. L. Rev. Addendum 132 (2012)
26 Pages Posted: 3 Nov 2011 Last revised: 21 Aug 2015
Date Written: November 1, 2011
The bulk of equities trading occurs electronically; the paper certificate is a thing of the past. However, despite attempts to modernize the commercial law governing investment securities through revisions to Article 8 of the Uniform Commercial Code, it is questionable whether Article 8 remains relevant and effective today. Specifically, the recent rise in cybercrime, and hacking in particular, poses risks to the securities trading system that were likely unanticipated by the drafters (and revisers) of Article 8. In this Article, I explore the cybercrime risk, the property ownership questions that might arise from a hack, and the consequences of judicial misapplication or misunderstanding of Article 8. I propose revisions to Article 8 that would make ownership clearer in the event of a cyber-theft of electronically traded equity securities.
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