What illegal act involves mixing personal funds with a client's funds?

The act of mixing personal funds with a client's funds is known as commingling. This practice is a violation of ethical and legal standards for financial and fiduciary responsibilities. Professionals, especially in fields such as law and financial services, are required to keep client money separate from their own personal finances to prevent any potential conflicts of interest and to maintain transparency.

When funds are commingled, it becomes difficult to track the true ownership and the purpose of each dollar, which can lead to misuse and mismanagement of client assets. Maintaining a clear boundary between personal and client funds not only honors the trust placed in the professional but also adheres to regulatory requirements that aim to protect clients from potential fraud or theft.

Misappropriation refers to the unauthorized use or theft of another's property, but it does not specifically involve the mixing of funds. Fraud typically involves deceitful practices intended to secure unfair or unlawful gain, while embezzlement is the act of wrongfully taking or using funds that have been entrusted to someone. While these terms are closely related to issues of financial misconduct, commingling specifically identifies the practice of mixing funds, making it the correct choice in this context.