Self-dealing is a term used in legal and business contexts to describe a situation where individuals or entities in positions of authority or trust take advantage of their position for personal gain, often at the expense of others. It involves conflicts of interest and raises ethical and legal concerns.

In legal terms, self-dealing refers to transactions or actions where a person in a fiduciary role, such as a trustee, director, or agent, engages in a transaction that benefits themselves personally or their close associates, rather than acting in the best interests of the individuals or entities they are obligated to serve. This can include actions like diverting funds, misusing assets, or entering into agreements that result in personal gain.

Self-dealing can occur in various settings, including corporate governance, nonprofit organizations, and trusts. For example, a corporate executive may use their position to secure contracts or business deals that primarily benefit their own personal interests, disregarding the interests of the company and its shareholders. Similarly, a trustee might engage in self-dealing by making decisions that favor themselves or their family members, rather than the beneficiaries of the trust.

From a legal standpoint, self-dealing is typically considered a breach of fiduciary duty. Fiduciary duties require individuals in positions of trust or authority to act in good faith, with loyalty, and in the best interests of those they serve. Self-dealing undermines these obligations and can result in civil lawsuits or legal actions seeking remedies and damages for those affected by the misconduct.

To protect against self-dealing, legal frameworks often impose strict rules and regulations. These can include disclosure requirements, conflict of interest policies, independent oversight, and mechanisms for challenging and addressing self-dealing transactions. By establishing these safeguards, the aim is to prevent conflicts of interest and promote transparency, fairness, and accountability.

It is important for individuals in positions of authority or trust to understand the legal implications of self-dealing and to uphold their fiduciary duties. Compliance with laws and ethical standards not only protects the interests of others but also safeguards the reputation and credibility of organizations and individuals involved.


Self-dealing refers to the misuse of authority or position for personal gain, rather than acting in the best interests of others. It is considered a breach of fiduciary duty and can have serious legal consequences. By promoting transparency, implementing safeguards, and upholding ethical standards, organizations and individuals can mitigate the risks associated with self-dealing and maintain trust and integrity in their dealings.

Video Transcript

What Is Self-Dealing?

Maybe you have heard this in the news. If a congressperson or attorney or business owner is engaging in self-dealing, often it makes the news. It can have criminal consequences, and there can be important and significant civil consequences.

Well, quite simply, self-dealing is when a person puts their own interests ahead of a person they are responsible for.

So, for example, if an attorney is self-dealing, the attorney is putting her own interests ahead of her client. Or, if a business owner is self-dealing, the business owner is putting his interests ahead of his company. Or for example, if the president of a company is self-dealing, it means that she is benefiting personally in a way that is not to the advantage of the company.

So self-dealing is quite simply putting yourself first in a deal when you have a duty to care for somebody else or something else like a company, an attorney’s client, a doctor’s patient, or somebody else you have a duty of loyalty to.

In legal terms, this is called a fiduciary relationship or a fiduciary duty. It simply means you are supposed to act in their best interest, not your own best interest. And the consequences of self-dealing are quite significant. Legally and civilly, it can be called a breach of fiduciary duty. Criminally, it can also have significant legal consequences, but usually, on a criminal standpoint, it is not a standalone crime. It is typically added to other charges that are brought against a person accused of self-dealing and other illegal conduct.

I am Aaron Hall, an attorney for business owners and entrepreneurs. If you find this helpful and you are interested in learning about other topics of interest to business owners, feel free to subscribe.