Having broken rules, squadron leader quits (7)
I believe the answer is:
resigns
'quits' is the definition.
(resigning is a kind of quitting)
'having broken rules squadron leader' is the wordplay.
'having broken' indicates putting letters inside (inserted letters break into the word).
'rules' becomes 'reigns' (reign can mean to rule or govern).
'leader' suggests taking the first letters.
The initial letter of 'squadron' is 's'.
'reigns' enclosing 's' is 'RESIGNS'.
(Other definitions for resigns that I've seen before include "Gives up (a post)" , "does the honourable thing" , "abdicates" , "Leaves job voluntarily" .)