License Law & RulesQuestion 44 of 120

A broker who improperly takes and uses a client's escrow money for the broker's own purposes has committed:

a.Puffing
b.Novation
c.Subrogation
d.Conversion

Explanation

Conversion is the unauthorized use or appropriation of another person's funds or property, such as a broker spending client escrow money. It is more serious than commingling, which is merely mixing funds. Conversion is grounds for severe discipline and possible criminal liability.

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