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 angels yawning in an empty heaven;
Alternate shows of dynamite and rain;
And choosing forced on free will: fire or ice.”
—Philip Larkin (1922–1986)
“I was at work that morning. Someone came riding like mad
Over the bridge and up the road—Farmer Rouf’s little lad.
Bareback he rode; he had no hat; he hardly stopped to say,
“Morgan’s men are coming, Frau, they’re galloping on this way.”
—Constance Fenimore Woolson (1840–1894)