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In Law, What Is Misappropriation?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 30 September 2014
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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.

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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.

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anon313026
Post 3

I have experienced a case of misappropriation in research. My project manager resubmitted our joint paper to a peer-reviewed journal behind my back and excluded my name. More to say, starting from the idea, data analysis, econometric estimations and whole first draft of the paper were solely done by me.

To cover it up, she made an official complaint to the director that I did violate good scientific practice. It was severely investigated, but luckily it was concluded I am not guilty.

However, when I reported about her fraud, it was just swept under the rug. Where is the justice?

bythewell
Post 2

I was living in Africa for a while and misappropriation is rife in a lot of areas. Unfortunately, this kind of corruption really holds back a community.

I was trying to work with one particular group which was supposed to be receiving money from the government in order to support local artisans.

But the group president would simply take the funds and spend them on his mistress and then complain about how they couldn't get anything done, because there wasn't enough money.

They could have done so much, but it was all stopped by one man.

Even more unfortunate was that I found out later his boss knew all about it and just couldn't do anything to stop it.

The laws guiding the misappropriation of funds are so important to a functioning society.

pleonasm
Post 1

One of the funniest examples of misappropriation that I've seen on television was on an episode of Sex and the City.

It was the one where Sam was "seeing" a man who was involved in the stock market, as a broker I assume, but I can't remember. And he started giving her tips on what to buy which she duly noted.

Finally, while she had him handcuffed to the bed, the police burst in to arrest him, because apparently he had been giving his "tips" out all over town.

Trade secrets misappropriation was never so funny.

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