In Law, what is Misappropriation?

Misappropriation is the use of funds or property for unauthorized purposes. This term is most commonly used when people such as trustees, government officials, executors, and other people charged with safeguarding funds and property are involved in the misuse of the things they have been trusted to care for. Misappropriation is a crime in most regions of the world and people can be sentenced to prison for engaging in this activity.

One classic example of misappropriation is embezzlement, in which people take funds to which they are not entitled. People may misappropriate funds or property for their own purposes, or for other uses which were not authorized. For example, an executor who takes funds set aside for descendants of the deceased and donates it to charity is engaging in misappropriation. Even if the executor's actions were for a good cause, they are still illegal because the use to which they were put was not authorized.

The term “misappropriation” can also be used to describe the abusive or unauthorized use of information or ideas. For example, when people use insider knowledge of a company to manipulate the stock market, this is a form of misappropriation, because they are using confidential information for unauthorized purposes. Likewise, someone who uses an idea from a conference, paper, or other publication for their own work without crediting the originator of the idea is misappropriating by borrowing an idea without permission.

Investigation of misappropriation can become complicated. People are very good at covering their tracks when they misappropriate, and may use a variety of techniques to conceal their activities or to blur their legality to make it difficult to identify them. Audits of financial accounts can sometimes reveal this type of activity, as can whistleblowing from people who observe this activity and report it to authorities. People who observe this type of activity are often encouraged to report it in the interests or protecting members of the public and people directly affected.

The penalties for misappropriation vary, depending on the type of activity someone is involved in. People are usually expected to make reparations, restoring the funds or property to the rightful owner. They can also spend some time in prison for their activities. In the academic community, someone who misappropriates ideas or research may find that the activity is a career-ender, as other members of the community will usually shun someone who has misappropriated materials for his or her own use.