Watered stock is an asset with an artificially-inflated value.[1] The term most commonly refers to a form of securities fraud in which a company issues stock to someone before receiving at least the par value in payment.[2]
Historically, stock watering was prevalent in the 19th century rail industry in the United States.[3][4]
- ^ McCormack, Alfred. 1931. "Review of Stock Watering: The Judicial Valuation of Property for Stock-Issue Purposes". The Yale Law Journal. 40, no. 8: 1344–1345.
- ^ Dodd, David L. Stock Watering: The Judicial Valuation of Property for Stock-Issue Purposes. New York: Columbia University Press, 1930.
- ^ Ripley, William Z. (1911). "Stock Watering". Political Science Quarterly. 26 (1): 98–121. doi:10.2307/2141396. ISSN 0032-3195.
- ^ Greene, Thomas L. (1891). "Railroad Stock-Watering". Political Science Quarterly. 6 (3): 474–492. doi:10.2307/2139489. ISSN 0032-3195.