Legal Question in Securities Law in Maryland

Re: issued shares

Interesting question. These shares are negotiable securities. So, if the holder takes for value, in good faith, without notice of any adverse claims, the law would say that person is entitled to the shares, and the company cannot cancel them. However, that is never the case. The company cancels the shares, alleges fraud, or lack of consideration, and bottom line, the shares are canceled, and now the ball is in the holder's court to do something. Much like that old adage, possession is 9/10s of the law. Should they do it? No. Can they do it, yes? Bang, they did it. Obviously, the person you bought these shares from put them up to it. It is really not the company's business, unless they did not receive the $750k. You would have to threaten to sue everyone involved, for conversion, breach of contract, fraud, etc. and seek consequential damages, etc. Your seller and the company. If they did not resolve the matter, you would in fact have to follow through. They may be doing this to keep you from selling these freely traded shares in the marketplace and raining on their parade on trying to get the stock propted up....would not be the first time a company did something like that...hopefully you are a citizen of a different state and the amount in controversy is more than $75k....into federal court you go. Now, they have to disclose a lawsuit...hmmmm....maybe it is easier to give you back your stock?