Bubba has a cash account and fails to make full and prompt payment for a purchase. The broker liquidated the transaction. Two weeks later, Bubba places another buy order for 100 shares of XYZ. What does the broker do?
A)refuses the order
B)handles the order after obtaining a promise from Bubba to effect prompt settlement
C)requires a 25% down payment before executing the order
D)executes the order at its own risk

Question

Quizplus · Accepted Answer

refuses the order. Reg T requires that under these circumstances the account must be frozen for 90 days. Any trade prior to that, requires cash in advance.

Bubba Has a Cash Account and Fails to Make Full