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Misappropriation of Client Funds

Dashboard > Violations > Misappropriation of Client Funds

Misappropriation of Client Funds

Commingling of client funds is often a first step that eventually leads to misappropriation of client funds (it's a gateway drug…er, violation).

And in order to misappropriate funds, one needs to have them in their possession first, hence the commingling we just reviewed.

The misappropriation of client funds occurs when a member firm uses client funds in an inappropriate or unauthorized way. Under FINRA Rule 3070, member firms must report this activity if discovered by any employee or p...

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