How Self-Dealing Works
“Self-dealing may involve many types of individuals who work under the guidelines of fiduciary responsibility. They may include trustees, attorneys, corporate officers, board members, and financial advisors, among others. Self-dealing may consist of a variety of actions seeking to inappropriately enrich oneself, such as using company funds as a personal loan, ignoring a duty of loyalty to an employer to assume a deal or opportunity for oneself, or using insider or non-public information in a stock market transaction. Self-dealing may take many forms. It does not need to always directly enrich the individual committing the act, but can be on behalf of another party.“
Self-Dealing and Fraud
“On a corporate scale, self-dealing often involves partners, corporate officers, board members, and the like. They may take advantage of their position in ways that profit them at the expense of their clients, shareholders, employees, etc.
Self-dealing isn’t in and of itself a crime, but it does constitute a breach of fiduciary duty and a conflict of interest (often with insider information), and as such will likely merit punitive measures in a civil court. However, it is often accompanied by fraud with company funds, which is a crime and punishable as such.”
Examples of Criminal Penalties
“For instance, Title 18 of U.S. Code Section 1348 imposes a penalty of up to $250,000 in fines as well as up to 25 years in prison for securities fraud.”