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Kiting

Kiting

What is 'Kiting'

Kiting is the act of misrepresenting the value of a financial instrument for the purpose of extending credit obligations or increasing financial leverage.

2. A fraudulent act involving the alteration or issuance of a check or draft with insufficient funds.

Explaining 'Kiting'

1. Kiting generally occurs when securities firms fail to deliver securities of buy and sell transactions in a timely manner (before the three-day settlement period). The firm failing to receive the securities is required to purchase the shortage on the open market and charge the delinquent firm any associated fees. The delinquent firm is practicing the fraudulent act of kiting if it fails to purchase the securities on the open market and maintains a short position, delays delivery or takes part in transactions contrary to SEC regulations regarding the proper settlement of trades.

2. In the past, clearing checks between banks took extended periods of time. Individuals used to take advantage of this delay and wrote "bad" checks to deposit funds before the checks were cashed. Banks have tried to cut down on kited checks by placing holds on deposited funds and charging for returned checks.

Both of these kiting practices are considered illegal.


Further Reading

From kites to computers: Pennsylvania's Ben Franklin partnershipFrom kites to computers: Pennsylvania's Ben Franklin partnership
www.sciencedirect.com [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …

“Kites” and “anchors”: T he (im) mobility strategies of transnational L atin A merican families against the crisis in S pain“Kites” and “anchors”: T he (im) mobility strategies of transnational L atin A merican families against the crisis in S pain
onlinelibrary.wiley.com [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …

Foreign ownership and economic performance in Italy: not all is cherry-picking!Foreign ownership and economic performance in Italy: not all is cherry-picking!
ideas.repec.org [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …

The diplomacy of practitioners: for an ecology of practices about the problem of the coexistence of wind farms and red kitesThe diplomacy of practitioners: for an ecology of practices about the problem of the coexistence of wind farms and red kites
www.tandfonline.com [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …

Density, laying date, breeding success and diet of Black Kites Density, laying date, breeding success and diet of Black Kites
www.tandfonline.com [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …

Bare Branches and Drifting Kites: Tackling Female Infanticide and Foeticide in Tamil Nadu, IndiaBare Branches and Drifting Kites: Tackling Female Infanticide and Foeticide in Tamil Nadu, India
repub.eur.nl [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …

Check Kiting: The Inadequacy of the Uniform Commercial CodeCheck Kiting: The Inadequacy of the Uniform Commercial Code
heinonline.org [PDF]
… FROM KITES TO COMPUTERS … Ben Franklin, as an inventor, educator, diplomat, author and political economist, embodied those characteristics which the program … labor and financial organizations, four small busi- ness development centers, and 21 economic development and …


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