§12A-3-405.

§12A-3-405.
   
                  EMPLOYER'S RESPONSIBILITY FOR FRAUDULENT
                                      
   INDORSEMENT BY EMPLOYEE
   
   (a) In this section:
   
   (1) "Employee" includes an independent contractor and employee of an
   independent contractor retained by the employer;
   
   (2) "Fraudulent indorsement" means (i) in the case of an instrument
   payable to the employer, a forged indorsement purporting to be that of
   the employer, or (ii) in the case of an instrument with respect to
   which the employer is the issuer, a forged indorsement purporting to
   be that of the person identified as payee; and
   
   (3) "Responsibility" with respect to instruments means authority (i)
   to sign or indorse instruments on behalf of the employer, (ii) to
   process instruments received by the employer for bookkeeping purposes,
   for deposit to an account, or for other disposition, (iii) to prepare
   or process instruments for issue in the name of the employer, (iv) to
   supply information determining the names or addresses of payees of
   instruments to be issued in the name of the employer, (v) to control
   the disposition of instruments to be issued in the name of the
   employer, or (vi) to act otherwise with respect to instruments in a
   responsible capacity. "Responsibility" does not include authority that
   merely allows an employee to have access to instruments or blank or
   incomplete instrument forms that are being stored or transported or
   are part of incoming or outgoing mail, or similar access.
   
   (b) For the purpose of determining the rights and liabilities of a
   person who, in good faith, pays an instrument or takes it for value or
   for collection, if an employer entrusted an employee with
   responsibility with respect to the instrument and the employee or a
   person acting in concert with the employee makes a fraudulent
   indorsement of the instrument, the indorsement is effective as the
   indorsement of the person to whom the instrument is payable if it is
   made in the name of that person. If the person paying the instrument
   or taking it for value or for collection fails to exercise ordinary
   care in paying or taking the instrument and that failure substantially
   contributes to loss resulting from the fraud, the person bearing the
   loss may recover from the person failing to exercise ordinary care to
   the extent the failure to exercise ordinary care contributed to the
   loss.
   
   (c) Under subsection (b) of this section, an indorsement is made in
   the name of the person to whom an instrument is payable if (i) it is
   made in a name substantially similar to the name of that person or
   (ii) the instrument, whether or not indorsed, is deposited in a
   depositary bank to an account in a name substantially similar to the
   name of that person.