§ 25-8-510. Rights of purchaser of security entitlement from entitlement holder. - North Carolina Statutes

§25‑8‑510.  Rights of purchaser of security entitlement fromentitlement holder.

(a)        In a case notcovered by the priority rules in Article 9 of this Chapter or the rules statedin subsection (c) of this section, an action based on an adverse claim to a financialasset or security entitlement, whether framed in conversion, replevin,constructive trust, equitable lien, or other theory, may not be assertedagainst a person who purchases a security entitlement, or an interest therein,from an entitlement holder if the purchaser gives value, does not have noticeof the adverse claim, and obtains control.

(b)        If an adverse claimcould not have been asserted against an entitlement holder under G.S. 25‑8‑502,the adverse claim cannot be asserted against a person who purchases a securityentitlement, or an interest therein, from the entitlement holder.

(c)        In a case notcovered by the priority rules in Article 9 of this Chapter, a purchaser forvalue of a security entitlement, or an interest therein, who obtains controlhas priority over a purchaser of a security entitlement, or an interesttherein, who does not obtain control. Except as otherwise provided insubsection (d) of this section, purchasers who have control rank according topriority in time of:

(1)        The purchaser'sbecoming the person for whom the securities account, in which the securityentitlement is carried, is maintained, if the purchaser obtained control underG.S. 25‑8‑106(d)(1);

(2)        The securitiesintermediary's agreement to comply with the purchaser's entitlement orders withrespect to security entitlements carried or to be carried in the securitiesaccount in which the security entitlement is carried, if the purchaser obtainedcontrol under G.S. 25‑8‑106(d)(2); or

(3)        If the purchaserobtained control through another person under G.S. 25‑8‑106(d)(3),the time on which priority would be based under this subsection if the otherperson were the secured party.

(d)        A securitiesintermediary as purchaser has priority over a conflicting purchaser who has controlunless otherwise agreed by the securities intermediary. (1997‑181,s. 1; 2000‑169, s. 26.)