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Misappropriation of investor funds refers to the illegal diversion or misuse of money entrusted to an individual or entity responsible for managing those funds on behalf of investors. This financial misconduct can involve various deceptive practices, including embezzlement, theft, or unauthorized transfers, where funds intended for investment purposes are instead used for personal expenses, speculative trading, or to cover losses in unrelated activities. Misappropriation breaches the fiduciary duty owed to investors, violating their trust and potentially leading to significant financial harm. Regulatory authorities and law enforcement agencies rigorously investigate and prosecute cases of misappropriation to safeguard investor interests, uphold market integrity, and deter fraudulent behavior in the financial industry.