Looking for a legal term

[ffutures]

Is there a technical name for the type of fraud we see in the film / play The Producers? Specifically, overselling shares in the profits of some venture, then ensuring that the venture fails and there are no profits, so the overselling never becomes apparent?

The example I'll be using involves selling shares in the profit of a space expedition, then sabotaging the ship.

Comments

[whswhs.livejournal.com]

As a literary note, a fraud of this kind forms part of the plot of The Fountainhead. A group of confidence men raise funds to build a vacation area, and hire the hero, a modernist (and controversial) architect, to design the housing, confident that his design will be a disaster and will lose huge amounts of money.

[bemused-leftist.livejournal.com]

I was going to mention that. The book gave a good short explanation. Also, it didn't have to be about stock sales; the same thing could be done just taking simple loans.

Did Rand give a name to this resort project? If so, it might be used in a future set SF as a generic name for that sort of swindle.

[ffutures.livejournal.com]

I wonder if The Producers got the idea from that? Thanks!

[whswhs.livejournal.com]

Monadnock Valley. It's described in the first couple of chapters of Part IV of the book.