What term describes mixing funds with the broker's personal funds?

• A. Commingling
• B. Conversion
• C. Accountability
• D. Reasonable care

Answer: (A)

Mixing client funds with the broker’s own money is called commingling. It breaches the obligation to keep client assets separate and traceable, which protects clients from the broker using their money for personal or firm purposes and helps prevent misused or misplaced funds. When funds are commingled, it undermines trust and can lead to regulatory penalties, civil liability, and loss of the broker’s license.

Understand that another term, conversion, refers to taking someone else’s property and treating it as your own, which is a different wrongful act. Reasonable care describes the standard of conduct required, not the act of mixing funds, and accountability isn’t the term used for this specific misuse of client money.