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:
“It is part of the nature of consciousness, of how the mental apparatus works, that free reason is only a very occasional function of people’s “thinking” and that much of the process is made of reactions as standardized as those of the keys on a typewriter.”
—John Dos Passos (1896–1970)
“Captain Carpenter rose up in his prime
Put on his pistols and went riding out
But had got wellnigh nowhere at that time
Till he fell in with ladies in a rout.”
—John Crowe Ransom (1888–1974)