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.
The most common violations found in audits related to Regulation 2834 are: 1) The failure of the broker or designated officer to be a signatory on the trust account (this. may indicate a supervision problem). 2) Presence of an unlicensed signatory on the trust account who does not have fidelity bond. coverage.