(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 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
(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 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
priority over a purchaser of a security entitlement, or an interest therein, who does
not obtain control. Except as otherwise provided in subsection (4) of this section, purchasers who have
control rank according to priority in time of:
(a) 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 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 in the securities
account in which the security entitlement is carried, if the 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 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.
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