Kiting

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Kiting

Used in banking to refer to the practice of depositing and drawing checks at two or more banks and taking advantage of the time it takes for the second bank to collect funds from the first bank.
Also refers to illegally increasing the face value of a check by changing the numbers on the check.
In the context of securities, refers to the manipulation and inflation of stock prices.

Kiting

1. The illegal practice of deliberately misrepresenting the value of a security or transaction in order to extract more funds from a counterparty.

2. The illegal practice of writing a bad check on an account at one bank, depositing it at a second bank, and withdrawing cash. Check holds have made kiting more difficult than it once was.

3. The illegal practice of defacing a check by increasing the amount of money written on it. One may take advantage of bad handwriting, for example, by changing "ten" to "twenty" on the check.
References in periodicals archive ?
These forward looking statements relate to the potential charge Hemet Federal may incur as a result of the check kite.
In 1994, net income was affected by the 20 cents per share charge Firstar took in the second quarter to cover a loss from a check kite.
The insured had directed its employee, Pocaro, to review personally all checks in excess of $2,500 and to advise the bank president of possible check kites in customers' accounts.