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355.8-510 Rights of purchaser of security entitlement from entitlement holder.
(1) In a case not covered by the priority rules in Article 9 of this chapter or the rules
stated in subsection (3) of this section, an action based on an adverse claim to a <br>financial asset or security entitlement, whether framed in conversion, replevin, <br>constructive trust, equitable lien, or other theory, may not be asserted against a <br>person who purchases a security entitlement, or an interest therein, from an <br>entitlement holder if the purchaser gives value, does not have notice of the adverse <br>claim, and obtains control.
(2) If an adverse claim could not have been asserted against an entitlement holder under
KRS 355.8-502, the adverse claim cannot be asserted against a person who <br>purchases a security entitlement, or an interest therein, from the entitlement holder.
(3) In a case not covered by the priority rules in Article 9 of this chapter, a purchaser for
value of a security entitlement, or an interest therein, who obtains control has <br>priority over a purchaser of a security entitlement, or an interest therein, who does <br>not obtain control. Except as otherwise provided in subsection (4) of this section, <br>purchasers who have control rank according to priority in time of: <br>(a) The purchaser's becoming the person for whom the securities account, in
which the security entitlement is carried, is maintained, if the purchaser <br>obtained control under KRS 355.8-106(4)(a);
(b) The securities intermediary's agreement to comply with the purchaser's
entitlement orders with respect to security entitlements carried or to be carried <br>in the securities account in which the security entitlement is carried, if the <br>purchaser obtained control under KRS 355.8-106(4)(b); or
(c) If the purchaser obtained control through another person under KRS 355.8-
106(4)(c), the time on which priority would be based under this subsection if <br>the other person were the secured party.
(4) A securities intermediary as purchaser has priority over a conflicting purchaser who
has control unless otherwise agreed by the securities intermediary.
Effective: July 1, 2001 <br>History: Amended 2000 Ky. Acts ch. 408, sec. 174, effective July 1, 2001. -- Created
1996 Ky. Acts ch. 130, sec. 163, effective January 1, 1997.
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