A lawsuit against Barnett Banks' securities subsidiary in Florida is shaping up as a test of the regulatory authority the National Bank Act has over how banks sell securities.

A state court in Florida last week denied Barnett Securities Inc.'s motion to dismiss a lawsuit alleging it violated the law by selling securities from bank branches that hadn't been registered with state securities regulators.

Circuit Court Judge Guy W. Spicola disagreed with Barnett's contention that the National Bank Act allows it to sell securities from branches without such registration.

Because the case pits federal law against state regulators, it case could wind up before the Supreme Court, some attorneys said. If upheld, Judge Spicola's order would change the way banks sell securities.

The securities activities of nationally chartered banks, for instance, would be open to scrutiny by state regulators. Many of their branches would be required to register as securities operations. And many would have to alter how they compensate bank employees who refer customers to bank- brokers.

"That would be horrific," said Robert M. Kurucza, a partner at Morrison & Foerster, Washington. "Many banks would have sales from unregistered branches." Mr. Kurucza is general counsel with the Bank Securities Association, Wayne, Pa.

Banking industry lawyers are divided over the merits of Judge Spicola's arguments. Some say the National Bank Act allows nationally chartered banks to sell securities without checking with state authorities. This camp points to the Interagency Statement on Retail Sales of Nondeposit Investment Products, which they say gives banks the power to sell securities.

"Barnett is a national bank and has powers given to it by national statute," said Michael Crotty, general counsel for the American Bankers Association.

But those that agree with the court say the National Bank Act does not automatically overule state law."The National Bank Act is thought to be preemptive of state regulations, but it is not thought to be absolutely preemptive," said David W. Roderer, an attorney with Goodwin, Proctor & Hoar in Washington. "It is therefore easy to argue that states should have licencing abilities."

As the judge saw it, the lawsuit addressed securities sales, not banking. "The appropriate law to apply in this case is therefore the law pertaining to the sale of securities," Judge Spicola's order said.

If that view were upheld, many banks would have to change the way they pay bank employees for referring customers to brokers.

Barnett branch employees, for instance, receive $5 to $7 for referring a customer to a Barnett Securities broker."Our position," said Peter W. Homer, Barnett's outside attorney, is that compensation of Barnett's bank employees "is governed by bank regulators." The referrals "were on behalf of the bank, not on behalf of the securities subsidiary," he said.

Another lawyer, however, said state securities laws cover issues left open by federal regulations.

"Securities regulations address consumer concerns," said F. Ronald O'Keefe, a banking and securities lawyer at Hahn Loeser & Parks, Cleveland. "There's nothing in the National Bank Act that addresses these issues."

"This sends a signal to banks that they won't be able to hide behind the National Bank Act," Mr. O'Keefe said.

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