Prohibited Transaction
/prəˈhɪbɪtɪd trænˈzækʃən/
Definitions
- (n.) A transaction forbidden by law or regulatory rules, often under employee benefit or securities laws, due to conflicts of interest or misuse of fiduciary authority.
The plan administrator was found guilty of executing a prohibited transaction by engaging in self-dealing with plan assets.
Forms
- prohibited transaction
- prohibited transactions
Related terms
See also
Commentary
Commonly used in the context of ERISA and other trust or pension regulations where restricted transactions trigger legal penalties or corrective actions.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.