Two factors come into play: First, good quality applicators do a better job of applying paint, and more uniformly, than poor applicators. As a result, they achieve better hide, or coverage. Second, painting technique is a factor that could contribute to overspreading the product.
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.
This publication also contains a description of liquidation proceedings under the Securities Investor Protection Act (SIPA). Although the Bankruptcy Code provides for a stockbroker liquidation proceeding, it is far more likely that a failing brokerage firm will find itself involved in a SIPA proceeding. The purpose of SIPA is to return to investors securities and cash left with failed brokerages.