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:
“Freedom of enterprise was from the beginning not altogether a blessing. As the liberty to work or to starve, it spelled toil, insecurity, and fear for the vast majority of the population. If the individual were no longer compelled to prove himself on the market, as a free economic subject, the disappearance of this freedom would be one of the greatest achievements of civilization.”
—Herbert Marcuse (1898–1979)
“Love-light of Spain—hurrah!
Death-light of Africa!
Don John of Austria
Is riding to the sea.”
—Gilbert Keith Chesterton (1874–1936)