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:
“Poor shad! where is thy redress? When Nature gave thee instinct, gave she thee the heart to bear thy fate? Still wandering the sea in thy scaly armor to inquire humbly at the mouths of rivers if man has perchance left them free for thee to enter.”
—Henry David Thoreau (1817–1862)
“There can be no literary equivalent to truth.”
—Laura Riding (1901–1991)