A California broker is audited by the DRE and found to have commingled personal funds with client trust funds. Under California law, what is the most likely consequence?
Correct Answer
D) The broker's license may be suspended or revoked by the DRE
Under California Business and Professions Code §10176(e), commingling personal funds with client trust funds constitutes grounds for disciplinary action, up to and including license suspension or revocation. Commingling is treated as a serious breach of fiduciary duty because it endangers client funds and undermines the trust relationship at the core of agency.
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