Malfeasance: Legal Definition & Examples

Instructor: Lauren Johnston

I have a master's degree in Forensic Studies and have designed several courses for adult learners.

In this lesson, you will learn about the legal definition of malfeasance. We will review examples of malfeasance and learn how it is used in both civil and criminal law.

What is Malfeasance?

Malfeasance is a broad term for an act that is illegal and causes physical or financial harm to another individual. This illegal act can be tried in criminal and civil court. Under tort law, malfeasance has legal repercussions in civil court and the plaintiff can sue the defendant for monetary damages. Malfeasance acts can also be tried in criminal court. The charges in criminal court vary greatly depending on the crime that was committed.

Malfeasance is not to be confused with misfeasance which is a legal action that through carelessness or an accident harms another person financially or physically. Misfeasance can also be a civil charge under tort law and the defendant can be responsible for financial restitution.

Corporate Malfeasance

If you have ever heard of a Ponzi scheme, then you are familiar with corporate malfeasance. While this is something you see in movies like Fun with Dick and Jane (2005) or Wolf of Wall Street (2013), it happens in the real world too. Bernie Madoff, Enron, and Goldman Sachs are all recent examples of how individuals or companies can cause serious financial damage through acts of corporate malfeasance.

Corporate malfeasance can range from unethical to illegal actions and can include cases that cause physical harm to another person. For example, let's say you are an American company who produces flooring in another country. In the United States, we have laws that govern chemical regulations and waste. If you are producing your flooring in another country because you are attempting to use chemicals that are not allowed in the United States, then your actions are unethical. While your actions are not illegal in that country, you are still engaging in an unethical, deceptive practice for profit. You can be subject to malfeasance in civil court and forced to pay damages to any individuals who are harmed by the chemicals in your flooring.

Criminal Malfeasance

In criminal court, malfeasance can apply to cases that cause financial damage or physical injury to another person. For example, medical malpractice is an act of criminal malfeasance. If someone died after poor treatment by a licensed doctor, the doctor can be charged in criminal court for negligent homicide. In corporate cases, a company that causes harm to an individual through deceptive practices can be criminally charged with securities fraud, conspiracy, or even money laundering depending on the details of the case.

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