What would happen?

[BinderGang]

Someone registers a domain name for them self and leaves the nameservers directed to the registrar. (Let's say the domain is JohnnyAppleseed.com and the page is showing ads.)

Later on a company or person by the name JohnnyAppleseed comes along and registers a similar name JohnnyAppleseedCo.com (now that they've grown and decided they need an internet presence). After a little while, the company's ads show up on on JohnnyAppleseed.com.

Can action be taken?