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:
“The writer, unlike his non-writing adult friend, has no predisposed outlook; he seldom observes deliberately. He sees what he did not intend to see; he remembers what does not seem wholly possible. Inattentive learner in the schoolroom of life, he keeps some faculty free to veer and wander. His is the roving eye.”
—Elizabeth Bowen (1899–1973)
“Whenever the moon and stars are set,
Whenever the wind is high,
All night long in the dark and wet,
A man goes riding by.”
—Robert Louis Stevenson (1850–1894)