Other Effects of Securities Fraud
Even if the effect of securities fraud is not enough to cause bankruptcy, a lesser level can wipe out holders of common stock because of the leverage of value of shares upon the difference between assets and liabilities. Such fraud has been known as watered stock, analogous to the practice of force-feeding livestock great amounts of water to inflate their weight before sale to dealers.
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Famous quotes containing the words effects and/or fraud:
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“Things gained through unjust fraud are never secure.”
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