freeriding


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Free-Riding

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.

freeriding

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 ?
This reduces the likelihood of members freeriding in the MPC.
"Having freeriding in Lebanon is something great," said Thomas Kray, who organized the event.
The Tanka poets, who have sought to express the local color of Joseon through the love, support and understanding of Joseon that preceded other genres, appear as if they are freeriding on national literature that justifies the history of the marching Japanese army with the intensifying of war.
(95) In this sense, the "Star Team" manufacturers were freeriding on the efforts of others--and the court abided this.
"There are plenty of flat surfaces that are ideal spots for freestyling and hilly stretches suitable for downhill races for all levels, freeriding, and sliding.
We conclude that platform MFNs generally harm competition, except in narrow circumstances in which freeriding concerns are especially strong.
VMG's underinclusive analysis, however, failed to uncover the myriad passages throughout the history of the SRA and the 1976 Act that emphasize the need to adequately compensate and reward artists and producers for their work, protect the integrity of the sound recording itself, and deter others from freeriding on the labor that goes into creating a sound recording.
freeriding on the efforts of more powerful states in gaining the
concerns about freeriding, the incentive effects of protection (and
(2013) "Freeriding, Upsizing, and Energy Efficiency Incentives in Maryland Homes." Fondazione Eni Enrico Mattei Working Paper No.
Informed traders that spend time and expense in investigating companies may see a small portion of their eventual winnings lost to HFT structural insiders who are capable of anticipating their orders and thus freeriding on their investment knowledge.
They also voted to oblige states to submit national energy and climate plans to the EC in time for review, with the aim to strengthen the regulatory framework and compliance and avoid 'freeriding'.