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:
“People who wish to salute the free and independent side of their evolutionary character acquire cats. People who wish to pay homage to their servile and salivating roots own dogs.”
—Anna Quindlen (b. 1952)
“Wilmer Cook: Keep on riding me, they’re gonna be picking iron out of your liver.
Sam Spade: The cheaper the crook, the gaudier the patter.”
—John Huston (1906–1987)