Michigan Compiled Laws
174-1962-8-5 - Part 5 Security Entitlements (440.8501...440.8511)
Section 440.8510 - Assertion of Action Based on Adverse Claim; Prohibition; Conditions; Priority.

Sec. 8510.
(1) In a case not covered by the priority rules in article 9 or the rules stated in subsection (3), 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 in a security entitlement, from an entitlement holder if the purchaser gives value, does not have notice of the adverse claim, and obtains control.
(2) If an adverse claim could not have been asserted against an entitlement holder under section 8502, the adverse claim cannot be asserted against a person who purchases a security entitlement, or an interest in a security entitlement, from the entitlement holder.
(3) In a case not covered by the priority rules in article 9, a purchaser for value of a security entitlement, or an interest in a security entitlement, who obtains control has priority over a purchaser of a security entitlement, or an interest in a security entitlement, who does not obtain control. Except as otherwise provided in subsection (4), purchasers who have control rank according to priority in time of 1 of the following:
(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 section 8106(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 section 8106(4)(b).
(c) If the purchaser obtained control through another person under section 8106(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.
History: Add. 1998, Act 278, Imd. Eff. July 27, 1998 ;-- Am. 2000, Act 348, Eff. July 1, 2001

Structure Michigan Compiled Laws

Michigan Compiled Laws

Chapter 440 - Uniform Commercial Code

Act 174 of 1962 - Uniform Commercial Code (440.1101 - 440.11102)

Article 8 - Investment Securities (440.8101...440.8601)

174-1962-8-5 - Part 5 Security Entitlements (440.8501...440.8511)

Section 440.8501 - “Securities Account” Defined; Acquisition of Security Entitlement; Conditions; Directly Held Financial Asset; Issuance Not as Security Entitlement.

Section 440.8502 - Action Based on Adverse Claim.

Section 440.8503 - Entitlement Holder Property Interest.

Section 440.8504 - Maintenance of Financial Asset by Securities Intermediary; Quantity; Manner; Limitation; Duties; Applicability to Clearing Corporation.

Section 440.8505 - Obtaining Payment or Distribution Made by Issuer of Financial Asset; Duties and Obligations of Securities Intermediary.

Section 440.8506 - Duty of Securities Intermediary to Exercise Rights With Respect to Financial Asset; Conditions.

Section 440.8507 - Compliance With Entitlement Order by Securities Intermediary; Conditions; Wrongful Transfer of Financial Asset Pursuant to Ineffective Entitlement Order; Liability.

Section 440.8508 - Changing Security Entitlement Into Another Form of Holding; Transferring Financial Asset to Securities Account of Entitlement Holder; Duties of Securities Intermediary; Conditions.

Section 440.8509 - Performance of Duties by Securities Intermediary.

Section 440.8510 - Assertion of Action Based on Adverse Claim; Prohibition; Conditions; Priority.

Section 440.8511 - Priority of Claims.