parking

1. Placing idle funds in a safe, short-term investment while awaiting the availability of other investment opportunities. For example, investors often end up parking proceeds from a security sale in a money market account while searching for other securities to purchase.
2. Transferring an asset to another party so that true ownership of the asset will be hidden. For example, an investor involved in the takeover of a company may park securities of the company with other investors so that the management of the target company will not know the extent of the investor's stock ownership. Parking for this purpose is generally illegal.

Case Study In June 2005 the Securities and Exchange Commission filed a civil action against Take-Two Interactive Software, Inc., a New York-based publisher and distributor of video and computer games. The action included several former and current executives of the company. The SEC claimed the executives had fraudulently inflated the firm's reported revenue during fiscal years 2000 and 2001 by parking hundreds of thousands of video games with distributors who had no obligation to pay for the product. The SEC claimed the firm fraudulently recorded the shipments as sales and subsequently accepted return of the games, sometimes disguised as purchases of new inventory, in later reporting periods. In this instance, the parking took the form of fraudulently moving product to other firms (and recording the move as sales) when Take-Two executives knew the product would be returned. The SEC claimed the fraudulent accounting practices allowed the firm to improperly recognize $60 million in revenue during 2000 and 2001, and to report aftertax fiscal-year earnings that were inflated by $20 million. In a settlement with the SEC, Take-Two and the executives consented to various penalties, including a corporate payment of $7.5 million.