Good Faith and Free Riding
The main difference between a good faith violation and free riding is the eventual deposit of funds to cover the buy. In free riding the buyer sells the security without ever depositing the funds to pay for the initial purchase.
The Federal Reserve considers a good faith violation an "abuse of credit" and requires the broker keep track of them. If the trader gets three violations in one year, the broker is required to restrict the account. This is compared to the free riding violation which results in an automatic restriction.
Read more about this topic: Free Riding
Famous quotes containing the words faith, free and/or riding:
“And yet, for all his faith could see,
I would not the good bishop be.”
—Ralph Waldo Emerson (1803–1882)
“Who are we? And for what are we going to fight? Are we the titled slaves of George the Third? The military conscripts of Napoleon the Great? Or the frozen peasants of the Russian Czar? No—we are the free born sons of America; the citizens of the only republic now existing in the world; and the only people on earth who possess rights, liberties, and property which they dare call their own.”
—Andrew Jackson (1767–1845)
“With its frame of shaking curls all in disarray,
earrings swinging,
make-up smudged by beads of sweat,
eyes languid at the end of lovemaking,
may the face of the slim girl
who’s riding on top of you
protect you long.
What’s the use
of Vi.s».n»u, iva, Skanda,
and all those other gods?”
—Amaru (c. seventh century A.D.)