DEFINITION of 'Parking Violation'

The illegal practice of an acquiring company concealing ownership of the target company by holding stock under a related third party before attempting corporate takeover.

BREAKING DOWN 'Parking Violation'

Unlike the parking violations that many of us as drivers commit inadvertently, this type of violation is  deliberately hostile. By having a third party hold significant portions of stock, the acquiring company can prepare for a takeover without exceeding certain ownership reporting levels and alerting the target company.

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RELATED FAQS
  1. How can a company resist a hostile takeover?

    Learn about some of the defensive strategies a public company's board of directors might utilize to prevent a hostile bidder ... Read Answer >>
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  3. What happens to the shares of a company that has been the object of a hostile takeover?

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  4. What are the components of a financial account?

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  5. Why is a shareholder rights plan called a "poison pill?"

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