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:
“I am thankful to God for this approval of the people. But while deeply grateful for this mark of their confidence in me, if I know my heart, my gratitude is free from any taint of personal triumph. I do not impugn the motives of any one opposed to me. It is no pleasure to me to triumph over any one.”
—Abraham Lincoln (1809–1865)
“Art, whose honesty must work through artifice, cannot avoid cheating truth.”
—Laura Riding (1901–1991)