| Liquidation Violation (cash) |
A Liquidation Violation occurs when the sale of a security takes place before or on the same day as the purchase, with the sale proceeds being applied toward that purchase. If the sale occurs after the trade date of the purchase, it is considered a liquidation to cover the purchase. The penalty for three Liquidations in 12 consecutive months requires that the account be restricted to settled cash only for the greater of 90 days or one year from the first liquidation. This is more common in Non-retirement accounts as we do not allow customers to over purchase their cash balances in IRA's due to contribution limits and constraints. |
