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Malfeasance comes from the Old French word mesfeance, which means "evil-doing." It usually refers to illegal or unethical conduct when applied to public officials.
While the word is often used concerning public officials, it can also apply to private individuals. It can happen to you at the office or in your personal life. With years of experience under our belt, lawyers at Schmidt & Clark have had numerous encounters with malfeasance cases. Here’s what it usually entails.
Summary of the Key Findings
- Malfeasance can result in victims incurring thousands of dollars in damages.
- It impacts both private individuals and businesses alike.
- There are three distinct types of malfeasance, each requiring different legal remedies.
- Recent years have seen a notable increase in corporate malfeasance cases,
What Is Malfeasance?
Malfeasance is a legal definition of illegal actions or wrongdoing by a public official [1]. The definition of Malfeasance encompasses both criminal acts and civil wrongs that a public official perpetrates in positions of power, such as government officials, politicians, judges, police officers, corporate officers, and others.
3 Types of Malfeasance
There are three types of malfeasance: tort law, corporate law, and civil law. Now let us talk about each in detail.
1. Malfeasance in Tort Law
Malfeasance is a more serious type of wrongdoing than nonfeasance or misfeasance.
- Malfeasance is when someone does something bad on purpose.
- Nonfeasance is when someone doesn't do something they were supposed to do.
- Misfeasance is when someone does something that's legal but still harms someone.
The definition of malfeasance in tort law means doing something that is against the law but done in a way that harms or injures others knowingly exceeding authority.
Misfeasance means doing something legal that is harmful to other people, even if the person hurting the other individual did not do it on purpose. Sometimes when someone does something bad, it causes harm to other people unintentionally.
If you do something that harms someone else, even if it's not illegal, it's called misfeasance. In some situations, someone has to do something a certain way, but they don't do it right, and that's misfeasance. Usually, people who do this are held responsible because they have a duty of care to do it right.
For example, a city manager lets his indigent cousin file false time cards putting him on the city payroll. The manager knows that this is against the rules but does it anyway.
This is Malfeasance. However, if the manager puts his able cousin on the payroll without knowing that this violates an anti-nepotism statute, this would be misfeasance, not Malfeasance.
The key difference between these two terms is that Malfeasance always involves some intention to do harm, while misfeasance does not.
2. Malfeasance in Corporate Law
Corporate malfeasance refers to unethical or illegal actions taken by individuals or organizations within a corporate setting.
These actions can have far-reaching impacts, from financial losses to environmental harm and diminished public trust.
Below are key categories of corporate misconduct, along with examples and their consequences:
Executive Misconduct
- Abuse of power for personal gain
- Conflicts of interest
- Failure to disclose material information
- Example: Enron scandal, where executives manipulated financial statements and engaged in insider trading
Financial Fraud
- Falsifying financial statements
- Embezzlement
- Ponzi schemes
- Money laundering
- Example: Bernie Madoff's $65 billion Ponzi scheme, the largest in history
Environmental Violations
- Illegal dumping of toxic waste
- Falsifying environmental impact reports
- Violating emissions standards
- Example: Volkswagen's emissions scandal, where the company installed software to cheat emissions tests
Employment Law Violations
- Discrimination in hiring or promotion
- Wage theft
- Unsafe working conditions
- Retaliation against whistleblowers
- Example: Walmart's multiple lawsuits for gender discrimination and unpaid overtime
Securities Fraud
- Insider trading
- Market manipulation
- Misrepresentation in securities offerings
- Example: The 2008 financial crisis, involving multiple instances of securities fraud related to mortgage-backed securities
In addition to these specific categories, other common forms of corporate malfeasance include:
- Bribery: Offering money or favors to gain unfair advantages
- Extortion: Using threats to obtain money or favors
- Antitrust violations: Engaging in practices that unfairly restrict competition
Corporate malfeasance can have severe consequences, including financial losses for shareholders and customers, environmental damage, and erosion of public trust. It often results in legal action, hefty fines, and sometimes criminal charges against responsible executives.
"Corporate malfeasance issues arise in various corporate decision-making contexts and can often result in a breach of fiduciary duty. Corporate directors must understand that they have corporate fiduciary duty responsibilities to the corporation, shareholders and its officers.”
- Frame&Zeller, law firm
3. Malfeasance in Criminal Law
Criminal malfeasance is a word for an illegal act that harms someone physically or financially, causing both physical and financial damage. The victim can try this in criminal and civil court.
If somebody does this to you, they might have to pay money in a civil suit. Criminal malfeasance can also lead to jail time. The following are examples of criminal malfeasance:
- Assault - intent to physical harm someone
- Battery - causing physical injury by unlawfully touching or using force on someone without their consent.
- Burglary - unlawfully breaking into a building to commit a crime.
- Arson - unlawfully setting fire to a property.
- Fraud - using deception to gain something or cause financial harm illegally.
- Identity Theft - unlawfully taking someone's personal information to commit fraud or another crime.
- Forgery - making a false document or altering a real one intending to deceive.
Recent Case Examples
- A corrections officer was charged with criminal malfeasance after an inmate completed suicide in her section of a jail.
- In a healthcare fraud case, a dentist was charged for billing insurers for fillings when she provided less expensive resin restorations, resulting in a $142,677 loss.
Typical Sentences
Sentences for criminal malfeasance can include:
- Jail time
- Fines
- Loss of employment, especially for public officials
- Probation
The severity depends on the specific crime and jurisdiction.
Plea Bargains
Plea bargaining is common in criminal malfeasance cases:
- Elements negotiated include incarceration time, probation length, and which charges are retained or dropped.
- Judges may reject plea deals if they significantly under-represent the offenses.
Restitution
Restitution is often part of criminal malfeasance cases:
- Defendants may agree to pay restitution to victims as part of a plea bargain.
- Sometimes, offering to pay a victim's medical bills or take rehabilitation courses can help secure reduced charges.
Civil Implications
Criminal malfeasance can have civil implications:
- Victims can sue for monetary damages in civil court.
- Civil liability often applies even without criminal charges, especially in misfeasance (improper performance of a lawful act).
Criminal malfeasance encompasses various illegal acts, including assault, battery, burglary, arson, fraud, identity theft, and forgery. The legal consequences can be severe, involving criminal penalties and civil liabilities.
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FAQs
What is an example of malfeasance?
An example of malfeasance will be securities fraud or if an employee of a company is caught bribing someone to get a contract for their company.
Is malfeasance a crime?
Yes, Malfeasance is a crime. Malfeasance can be tried in criminal and civil court.
Which is worse, misfeasance or malfeasance?
Malfeasance is worse than misfeasance because it is an illegal act that harms someone physically or financially.
What is an example of misfeasance in the police?
An example of misfeasance in the police would be if an officer used excessive force when arresting a suspect. The officer did not break the law but used more force than necessary, which harmed the suspect.
Can You Sue for Malfeasance?
Individuals can sue for malfeasance. If somebody does this to you, they might have to pay money in a civil suit with the criminal charges of malfeasance. Criminal malfeasance can also lead to jail time.
To sue for malfeasance, you must be able to prove that the person knew what they were doing was wrong and illegal. You also must be able to show that you were harmed because of their actions.
That is why it is important to talk to a lawyer if you think you have been a victim of malfeasance. If you feel you have a case, contact Schmidt & Clark, LLP for your free consultation with our legal team; they will ensure you get the money and justice you deserve.
References:
- https://www.law.cornell.edu/wex/malfeasance