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

[ffutures.livejournal.com]

Thanks to you both - watered stock and securities fraud may be the phrase I'm looking for.