Addressing an accusation of self-dealing

If you are in a position of trust and authority within an organization and are accused of self-dealing, you could face criminal penalties as well as reputational harm. There are defenses that may be available to you, however.

Self-dealing

Self-dealing applies when a person uses a position of trust for their personal gain instead of acting in the best interest of a person or organization to whom they owe a duty. Often, this involves a conflict of interest in fields like business or finance, although it can also happen in other industries.

For example, an executive may choose a contract with a company they have a personal interest in because they will receive money from that company, rather than using objective judgement regarding what is best for their organization.

Other examples of self-dealing include insider trading, where an employee uses confidential, non-public information to trade stocks at a higher amount, embezzlement which involves taking company funds for personal use, or accepting bribes that influence business decisions.

Penalties and potential defenses

The penalties for self-dealing may vary depending on the circumstances involved in the crime, however they generally include fines, restitution and imprisonment. Restitution involves repaying the victims to compensate them for their financial losses.

If you did not intend to engage in self-dealing that may be a defense, because proving criminal intent is a main element of finding a person guilty. Also, if you can show that you disclosed your potential conflict of interest and it was approved by your organization, this may be a defense to self-dealing because your actions were not deceptive.