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1. The practice of buying a security and then selling it without having enough cash or cash-equivalent to pay for the original purchase. In the United States, transactions do not settle for three days; that is, a buyer does not pay for a security until three days after he/she buys it. If the buyer does not have the cash to pay for the purchase, he/she may theoretically sell the security on the same day and use that money to pay for the purchase. Free-riding is illegal under SEC rules and is prohibited by the Financial Industry Regulatory Authority.

2. An illegal practice in which an underwriter does not place a new issue of a security and then later sells it for a higher price.


1. An action taken by a syndicate member to withhold a portion of a new security issue from sale because of a belief that a later reselling of the withheld security will yield a higher price. Freeriding is prohibited by the SEC.
2. The purchase and sale of a security in a short period of time without putting up any money. Freeriding by investors is prohibited by Federal Reserve Board's Regulation T. Compare frozen account.
References in periodicals archive ?
important sense freeriding on the information procured by the promisee.
Specifically, TCI theory offers that a firm's collection of decisions on how to organize international interdependencies can also be related to efforts to protect organizational reputation from freeriding partners and efforts to internalize markets for knowledge (Hennart 2001).
113) Specifically, the industry has expressed concern that releasing this data makes CCI publicly available and results in freeriding.
2008), 'Time inconsistency and freeriding in a monetary union 'Journal of Money, Credit and Banking, 40(7), pp.
BarterCast: A practical approach to prevent lazy freeriding in P2P networks.
As a result, if corporations do not contribute to the state in turn, or do not contribute enough to the state, they are effectively freeriding on the individuals' taxes.
Embedding Social Dilemmas in Intergroup Competition Reduces FreeRiding.
A functionalist approach is more susceptible to freeriding behaviour, for instance.
A group can enforce this social contract only if it can punish group members who violate the contract and prevent non-members from freeriding.
The ski app takes the asafety-firsta rule of freeriding seriously and therefore FATMAP is equipped with detailed terrain intelligence to detect avalanche risk zones, slope gradients and crevasse zones.
Como bem colocou o classico de Olson (1971), os problemas decorrentes da tomada de decisao em conjunto e da divisao dos ganhos de forma desproporcional incutem a necessidade de tomar decisoes de maneira diferente: players dominantes devem ditar o tom, player pequenos devem fazer freeriding.
2] emissions, the Clean Power Plan, will not solve fragmented action or freeriding.