Attorney Trust Account

The prosecutor used his trust account to finance trade operations. Is this legal? I assumed not, but do not really know. It seems that this would be a type Madoff, Bernie Ponzi scheme, robbing Peter to pay Paul. We are in California. What would happen if they were found by the bar or the state prosecutors office?

It depends on the terms of the trust. If a trust account which was left alone without stipulations on usage, it is possible that what he is doing is completely legal, as he returns to the IRS correctly. People use personal funds to finance personal business ventures all the time - it's only a problem if the funds are not classified for tax purposes. If the trust provisions on the use of this term he does to certain things - education, for example - to use to finance business operations is not acceptable.
If confidence is not a lawyer, but an account that is held in trust for a client, it is certainly illegal, and if you've seen all the documents that this happens, contact the Association State Bar or the attorney general's office (if you do not report it and they are charged, you may have problems if your work supports this process and there is evidence that you knew it was happening).

I suggest you contact the Attorney General of California, if you suspect a lawyer is misuse of trust account funds.