State Codes and Statutes

Statutes > Connecticut > Title42a > Art008 > Sec42a-8-510

      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.