ID: Office: UILC: CCA_2009060308440350 ------------------------- 4975.00-00 Number: 200930039 Release Date: 7/24/2009 From: -------------------- Sent: Wednesday, June 03, 2009 8:49 AM To: -------------------------------------------- Cc: ---------------- ---- Subject: Section 4975 case --------- ----------------- To give you a heads up I asked DOL about the facts in this case and I was told the following: "Informally, it seems to us that unless the fiduciary needed the plan investment in the mutual fund to carry out his scheme, (e.g. he relied on the plans investment to complete a transaction he couldn't do alone in his personal capacity) there's not a PT. But, it definitely would be a 404 violation to get the plan involved in an illegal scheme, and the fiduciar y would be liable to the plan under section 409 of ERISA for any losses the plan suffered as a result, i.e., the penalties and disgorgement." DOL issued a Field Assistance Bulletin on the allocation of the proceeds of SEC settlements w ith mu tual fund-it did not deal with your issue however. See the attached DOL Field Assistance Bulletin 2006-01 (April 19, 2006). The violation that DOL's mentions are fiduciary breaches and would be under the jurisdiction of DOL. I would recomm end referring to the case to the DOL field office especially if the taxpayer's com pany was involved in the handling of other qualified plans. If y ou want to talk further you can call us when you get in. My telephone number is --------------------- - - and ------------------------ phone number is --------------------- . ----------------------