N.Y. Uniform Commercial Code Law § 8-510: Rights of Purchaser of Security Entitlement from Entitlement Holder

Section 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), 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 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), 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 Section

8--106(d)(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 Section 8--106(d)(2); or

(3) if the purchaser obtained control through another person

under Section 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.