Purchasing employer securities from a 401k plan

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In his self-directed account, the owner of a company is invested in his company stock (about $120,000 worth). He gradually wants to buy back these shares. Under what conditions may he purchase the stock from the plan?

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Under conditions that would cause the transactions to be exempt from proscriptions on prohibited transactions. See section 408 of ERISA or the procedures for obtaining a personal prohibited transaction exemption from the Department of Labor.