Sec. 42a-8-510. Rights of purchaser of security entitlement from entitlement holder.
Sec. 42a-8-510. Rights of purchaser of security entitlement from entitlement
holder. (a) In a case not covered by the priority rules in article 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 section 42a-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 article 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
subsection (d)(1) of section 42a-8-106;
(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 subsection (d)(2) of section 42a-8-106; or
(3) If the purchaser obtained control through another person under subsection (d)(3)
of section 42a-8-106, 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.
(P.A. 97-182, S. 50; P.A. 98-93, S. 11, 15; P.A. 01-132, S. 151.)
History: P.A. 98-93 amended Subsec. (a) to replace "buys" with "purchases", effective July 1, 1998; P.A. 01-132
amended Subsec. (a) to make provisions applicable "In a case not covered by the priority rules in article 9 or the rules
stated in subsection (c) of this section", amended Subsec. (c) to replace default rule that purchasers who have control rank
equally with default rule that, except as provided in Subsec. (d), priority among purchasers who have control is determined
by the time of certain events and add Subdivs. (1), (2) and (3) re such events, and designate as Subsec. (d) existing exception
re the priority of a securities intermediary as purchaser over a conflicting purchaser who has control.