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(This article was originally published Friday)

NEW YORK (Dow Jones)--Piper Jaffray Cos. (PJC) is freezing automated customer account transfers this week, effectively blocking clients from moving their accounts with departing Piper brokers.

All automated transfers submitted to Piper Jaffray will be rejected from Aug. 7 to Aug. 11, but the company will resume processing automated transfer requests on Monday, when Piper's retail brokerage unit gets acquired by UBS AG (UBS).

"To protect the integrity of our clients' data, we have a temporary hold on automated customer account transfer," said Rob Litt, a Piper Jaffray spokesman. "As soon as the sale to UBS is complete, clients will be free to transition their accounts as needed."

Black-out periods of a few days or more are normal to allow conversion of systems under an acquisition. But some legal experts said a full week is too long given that some companies make the switch over two or three days, particularly on a weekend to prevent disruption.

Citigroup Inc. (C) for instance converted Legg Mason Wood Walker's systems over to Smith Barney over the three-day Presidents Day weekend last February.

Conversion at Advest Group Inc., which was acquired by Merrill Lynch & Co. (MER) in December, didn't take a full week, said a person familiar with Merrill's conversion.

"I have not heard from my experience that a firm has frozen ACATs that long," said Willis Riccio, a securities lawyer who formerly served as regional administrator for the Securities and Exchange Commission's New England office.

Companies are also required to seek regulators' approval to be able to freeze ACAT processing, because it curtails customers' right to move their accounts, added Jacob Zamansky, a securities lawyer in New York.

Trades normally settle within three days after being placed. With the week-long hold in account transfer, clients could face constraints in trade settlement if they do transactions through a departing broker. Rather than face potential inconveniences and margin costs, some customers of brokers who defected opted to conduct trades with other brokers at Piper Jaffray this week, said a financial advisor who traded for a customer of a former colleague.

A person familiar with Piper's conversion said the company was "in communication" with the New York Stock Exchange where a spokesman, Brandon Intindola, declined to comment whether regulators granted approval.

To take advantage of the freeze on ACAT processing, some Piper managers urged brokers to use the break as an opportunity to try to retain clients of departing brokers. In a memo to some Piper Jaffray brokers, one official urged brokers to make initial calls and arrange appointments with clients of departing brokers during the five-day disruption.

As of late July, Piper Jaffray has lost at least 14% of its 817 brokers when the acquisition was announced.

The Swiss bank is paying $500 million for Piper's retail brokerage unit but will pay an extra $75 million if Piper manages to keep at least 90% of its over 800 brokers until the handover. The bonus scales down as the attrition rate increases and drops to zero if Piper retains less than 80% of the advisors it had when the deal was announced.

"They're just buying themselves a grace period of one week so they can pitch their customers to stay with them," Zamansky said.