12A:8-510 Rights of purchaser of security entitlement from entitlement holder.
12A:8-510. Rights of Purchaser of Security Entitlement from Entitlement Holder.
a.In a case not covered by the priority rules in Chapter 9 or the rules stated in subsection c. of this section, an action based on an adverse claim to a financial asset or security entitlement, whether framed in conversion, replevin, constructive trust, equitable lien, or other theory, may not be asserted against a person who purchases a security entitlement, or an interest therein, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim, and obtains control.
b.If an adverse claim could not have been asserted against an entitlement holder under 12A:8-502, the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest therein, from the entitlement holder.
c.In a case not covered by the priority rules in Chapter 9, a purchaser for value of a security entitlement, or an interest therein, who obtains control has priority over a purchaser of a security entitlement, or an interest therein, who does not obtain control. Except as otherwise provided in subsection d of this section, purchasers who have control rank according to priority in time of:
(1) the purchaser's becoming the person for whom the securities account, in which the security entitlement is carried, is maintained, if the purchaser obtained control under 12A:8-106d. (1);
(2)the securities intermediary's agreement to comply with the purchaser's entitlement orders with respect to security entitlements carried or to be carried in the securities account in which the security entitlement is carried, if the purchaser obtained control under 12A:8-106d. (2); or
(3)if the purchaser obtained control through another person under 12A:8-106 d. (3), the time on which priority would be based under this subsection if the other person were the secured party.
d.A securities intermediary as purchaser has priority over a conflicting purchaser who has control unless otherwise agreed by the securities intermediary.
L.1997, c.252, s.1; amended 2001, c.117, s.22; 2001, c.386, s.135.
Section: Previous 12a-8-503 12a-8-504 12a-8-505 12a-8-506 12a-8-507 12a-8-508 12a-8-509 12a-8-510 12a-8-511 12a-8-601 12a-9-101 12a-9-102 12a-9-103 12a-9-104 12a-9-105 Next
Last modified: October 11, 2016