the act of a fiduciary (or trustee; or lawyer) mixing his/her own funds with those belonging to a client (or customer). Commingling is generally prohibited – unless the fiduciary maintains an exact accounting of the client’s funds (and how those funds have been used).
EXAMPLE:
John – who is a bank trustee – felt he had an excellent tip on a stock. So, he commingled his own funds with the funds of one of the bank trusts. The investment is successful, but the bank still disciplines John (ie, the trustee), because he never made an exact accounting of the stock purchased with trust money.
