Liquidation and Free Riding
A liquidation violation occurs when the client sells a security to satisfy a cash obligation for the purchase of a different security after trade date. This is a violation because the sale of the second security will not be settled by the time the first purchase settles. A liquidation violation carries the same penalties as a good faith violation.
Read more about this topic: Free Riding
Famous quotes containing the words free and/or riding:
“Opinions are not to be learned by rote, like the letters of an alphabet, or the words of a dictionary. They are conclusions to be formed, and formed by each individual in the sacred and free citadel of the mind, and there enshrined beyond the arm of law to reach, or force to shake; ay! and beyond the right of impertinent curiosity to violate, or presumptuous arrogance to threaten.”
—Frances Wright (1795–1852)
“There can be no literary equivalent to truth.”
—Laura Riding (1901–1991)