This Plan of Distribution (the “Plan”) proposes a methodology for distributing to

 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-11530 
____________________________________ 
      ) 
In the matter of     ) 
      ) 
BANC ONE INVESTMENT   ) 
ADVISORS CORPORATION    ) 
      ) 
  and    ) 
      ) 
MARK            A.            BEESON,                                                )            
      ) 
Respondents.                                                            )            
____________________________________) 
 
 
MODIFIED PLAN OF DISTRIBUTION 

 
 
 
2
OVERVIEW 
This Plan of Distribution (the “Plan”) proposes a methodology for distributing to 
investors $50 million, plus accumulated interest, paid by Banc One Investment Advisors 
Corporation (“BOIA” or “Respondent”) in settlement of administrative proceedings 
addressing market-timing of mutual funds advised by BOIA.
1
   
On June 29, 2004, BOIA consented to the entry of an Order Instituting 
Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing 
Remedial Sanctions and a Cease-and-Desist Order (the “Order”), without admitting or 
denying the Order’s findings.  The Order found, among other things, that BOIA allowed 
excessive short-term trading in certain One Group Mutual Funds (“One Group”) from 
June 1999 through May 2003 that was inconsistent with fund prospectuses and 
potentially harmful to One Group shareholders. 
The Order required, among other things, that BOIA pay disgorgement of 
$10 million and civil penalties of $40 million, for a total payment of $50 million, and 
establish a Fair Fund under Section 308(a) of the Sarbanes-Oxley Act to provide for the 
ultimate distribution of funds to investors.  The Order further required that BOIA retain 
“the services of an Independent Distribution Consultant not unacceptable to the staff of 
the Commission and a majority of the independent members of the One Group Board of 
                                                
 
1
 As of June 29, 2004, BOIA was an Ohio corporation, headquartered in Columbus, Ohio, that 
was registered with the Commission as an investment adviser on November 22, 1991.  BOIA 
was a wholly owned subsidiary of Bank One, National Association (Ohio), which in turn was 
a wholly owned subsidiary of Bank One Corporation (“Bank One”), a multi-state bank 
holding company headquartered in Chicago, Illinois.  BOIA provided discretionary 
investment management services to individuals and companies, including the One Group 
family of mutual funds, Bank One’s mutual-fund complex.  Since the entry of the Order, 
Bank One and JPMorgan Chase & Co. have merged and their organizational structures have 
not survived the merger in their entirety.  The changes in structure caused by the merger do 
not, however, affect the analysis, operation or implementation of the Plan. 

 
 
 
3
Trustees” and that it “cooperate fully with the Independent Distribution Consultant and 
shall provide the Independent Distribution Consultant with access to its files, books, 
records, and personnel as reasonably requested for the review.”
2
  The Order also directed 
that “BOIA shall require that the Independent Distribution Consultant develop a 
Distribution Plan for the distribution of all of the disgorgement and penalties to be paid 
by BOIA pursuant to this Order, and any interest or earnings thereon, according to a 
methodology developed in consultation with BOIA and acceptable to the Staff of the 
Commission and the independent Trustees of the One Group funds.”
3
  The Respondent 
has agreed to pay all costs associated with the administration of the Distribution Plan, 
including any tax liability and tax compliance costs for the Qualified Settlement Fund 
(“QSF”).
4
   
In accordance with the Order, Respondent has retained Professor Joseph A. 
Grundfest, a professor of law at Stanford Law School and a former SEC commissioner, 
as the Independent Distribution Consultant (“IDC”).  This submission constitutes the Plan 
of Distribution required by the Order.  The Plan is subject to approval by the Commission 
and the Commission will retain jurisdiction over the implementation of the Plan.   
ADMINISTRATION OF THE PLAN
 
Appointment of an Administrator for the Fair Fund
 
The Commission’s Order requires that the IDC submit a Plan for the 
“administration and distribution of disgorgement and penalty funds pursuant to 
Rule 1101 of the Commission’s Rules of Practice.”
5
  Rule 1105(a) of the Commission’s 
                                                 
2
     Order     at ¶34. 
3
     Id.     
4
 See also footnotes 14 and 16. 
5
 Order at ¶ 34. 

 
 
 
4
Rules of Practice (“Rules”) provides that the Commission “shall have discretion to 
appoint any person ... as administrator of a plan of disgorgement or a Fair Fund plan and 
to delegate to that person responsibility for administering the plan.”  Accordingly, the 
IDC proposes that the Commission appoint Boston Financial Data Services, Inc. 
(“BFDS”) to serve as the administrator of the Fair Fund (“Fund Administrator”).   
BFDS, founded in 1973, is a third-party service provider that provides transfer 
agency services to over 145 fund companies.  Under the supervision of the IDC, BFDS’s 
responsibilities will include, among other things: overseeing administration of the Fair 
Fund, obtaining accurate mailing information for shareholders, preparing accountings, 
providing information necessary to accomplish the income tax compliance, ruling and 
advice work assigned to any Tax Administrator appointed by the Commission,  
distributing money from the Fair Fund to shareholders in accordance with this Plan, and 
setting up and staffing a call center to address shareholder questions or concerns 
regarding the distribution.  The IDC and BFDS currently have an agreement in place 
requiring BFDS to perform certain tasks in preparation for the forthcoming distribution of 
the Fair Fund.  To date, BFDS has successfully met its obligations under the agreement 
and the IDC believes that BFDS will perform satisfactorily as the Fund Administrator.   
Because BFDS is not a “Commission employee,” Rule 1105(c) requires that “the 
administrator shall ... obtain a bond in the manner prescribed in 11 U.S.C. 322, in an 
amount to be approved by the Commission,” but that “the Commission may waive 
posting of a bond for good cause shown.”  The IDC proposes that the bond requirement 
for BFDS be waived. 

 
 
 
5
Good cause exists to waive posting of a bond, because BFDS maintains sufficient 
insurance coverage against loss.  BFDS maintains, and will maintain until termination of 
the Fair Fund, a Financial Institutions Bond, a Computer Crime Policy and Errors and 
Omissions insurance.  The Financial Institutions Bond provides protection against, 
among other things, employee dishonesty, and forgery or fraudulent alteration of 
securities and negotiable instruments.  The Computer Crime Policy provides protection 
against, among other things, computer systems fraud, transfer fraud and destruction of 
data or programs by hackers or viruses.  The Errors and Omissions insurance protects 
against errors and omissions committed by employees in the course of their performance 
of professional services.  The insurance policies maintained by BFDS have been provided 
to the assigned Commission Staff for review and have been deemed “not unacceptable.”  
Under the Plan, $55,000,000 is the maximum amount that will be under BFDS’ custody 
and control. 
The IDC also proposes that the Fair Fund assets be held during the check-cashing 
period at Eastern Bank, a Massachusetts Chartered Mutual Bank (“Eastern Bank”).  
Eastern Bank maintains a Financial Institutions (FI) Bond including errors and omissions 
coverage.  The primary insurers are St. Paul Mercury Insurance Co., a member of the St. 
Paul Travelers Companies which, as of their most recent renewal, was rated A+ by A.M. 
Best, and Federal Insurance Company (Chubb), a member of the Chubb Group of 
Insurance Companies which, as of their most recent renewal, was rated A++ by A.M. 
Best.  Eastern Bank annually assesses the adequacy of its policy limits through extensive 
analysis of historical loss data, exposure to loss and internal company controls.  Eastern 
Bank’s limits are reviewed annually by its Board of Directors. 

 
 
 
6
Control of the Fair Fund 
Pursuant to the Order, on July 16, 2004, BOIA paid a total of $50 million into an 
escrow account at Citibank, N.A. to be invested in short-term United States Treasury 
Securities with maturities not to exceed six months.  On September 29, 2005, the SEC 
issued an Order Directing Escrow Agent To Transmit Funds (the “September 29 Order”) 
which directed that, upon the maturity of the securities held in the escrow account, the 
Escrow Agent, Citibank, N.A., transfer the monies in the escrow account to the Office of 
Financial Management at the SEC.  Accordingly, on January 12, 2006, in accordance 
with the September 29 Order, the Escrow Agent wired the monies to the SEC.   
The Commission has custody of the Fair Fund and shall retain control of the 
assets of the Fair Fund.  The Fair Fund is currently deposited at the U.S. Treasury Bureau 
of Public Debt (“BPD”) and will remain there until released in accordance with Step 
Fourteen below.  This Fair Fund will not receive additional funds, other than the interest 
from the funds on deposit at the BPD.   
The Fair Fund constitutes a QSF under Section 468B(g) of the Internal Revenue 
Code, 26 U.S.C. §468B(g), and related regulations, 26 C.F.R. §§1.468B-1 through 
1.468B-5.  Upon approval of the Plan, BFDS shall establish an account at Eastern Bank 
in the name of and bearing the Taxpayer Identification Number of the QSF.  Following 
approval of the Plan, and the IDC’s satisfaction of the requirements of Step Fourteen 
below, the Commission Staff shall cause the balance in the Fair Fund to be deposited in 
the account established by BFDS at Eastern Bank.  If appropriate, the release of funds to 
the account established by BFDS shall be staged in order to assure that neither BFDS nor 
Eastern Bank, at any time, have access to monies belonging to the Fair Fund in excess of 

 
 
 
7
their applicable insurance coverage.  The QSF account shall be invested in direct 
obligations of the United States Government of a type and term necessary to meet the 
cash requirements of the payments to investors, tax obligations and fees.  BFDS shall be 
the signer on the QSF account, subject to the continuing jurisdiction and control of the 
Commission.   
Tax Obligations Of The Fair Fund
 
The IDC and BFDS shall authorize Eastern Bank to provide account information 
to Damasco & Associates, appointed by the Commission as the Tax Administrator of the 
Fair Fund (“Tax Administrator”), pursuant to the March 10, 2006 Order Appointing Tax 
Administrator (Release No. 53468, Admin. Proc. File No. 3-11530).  The IDC and BFDS 
will cooperate with the Tax Administrator in providing information necessary to 
accomplish the income tax compliance, ruling and advice work assigned to the Tax 
Administrator by the Commission.  Respondent shall provide the Tax Administrator with 
funds to pay tax liability and tax compliance costs.  BFDS shall authorize Eastern Bank 
to provide duplicate bank statements for the QSF account directly to the IDC, the Tax 
Administrator and Robert J. Burson, Senior Associate Regional Director, Securities and 
Exchange Commission, 175 West Jackson Blvd., Chicago, IL 60604.   
Neither the IDC nor BFDS will provide tax advice to any investors receiving 
distributions from the Fair Fund.  In the event that the Internal Revenue Service issues 
guidance regarding the distribution, access to that guidance will be provided along with 
the other information to investors described in Step Fifteen below. 

 
 
 
8
Limitation on Liability 
 The IDC and the Fund Administrator, and/or each of their designees, agents and 
assistants, shall be entitled to rely on any Orders issued in this proceeding by the 
Commission, the Secretary by delegated authority, or an Administrative Law Judge, and 
may not be held liable to any person other than other than the Commission or the QSF for 
any act or omission in the course of administering the Fair Fund, except upon a finding 
that such act or omission is caused by such party’s gross negligence, bad faith or willful 
misconduct, reckless disregard of duty, or reckless failure to comply with the terms of the 
Plan.  This paragraph is an expression of the IDC’s and the Fund Administrator’s 
standard of care and is not intended, nor should it be deemed to be, a representation to or 
an indemnification of the IDC or the Fund Administrator or their designees, agents and 
assistants by the Commission or the QSF, nor should this paragraph preclude the 
Commission or the QSF from seeking redress from IDC or the Fund Administrator in 
accordance with the rules and regulations of the Commission and the QSF. 
DISTRIBUTION PLAN AND PROCEDURES
 
The Order requires that the IDC develop a Plan that “provide[s] for investors to 
receive, in order of priority, (i) their proportionate share of losses from market-timing, 
and (ii) a proportionate share of advisory fees paid by funds that suffered such losses 
during the period of such market timing.”
6
  Investors eligible to receive a share of the 
Fair Fund are those investors who held shares in the following mutual funds in which 
market timing occurred, on the days on which such market timing occurred, during the 
period from June 1999 through May 2003, except the identified timers referred to in 
                                                
 
6
 Order at ¶ 34. 

 
 
 
9
paragraphs 3 and 4 of the Order:  One Group Mid Cap Growth Fund; One Group Large 
Cap Growth Fund; One Group Diversified Equity Fund; One Group Mid Cap Value 
Fund; One Group Large Cap Value Fund; One Group Diversified Mid Cap Fund; One 
Group Small Cap Value; One Group Diversified International Fund; One Group 
International Equity Index Fund; One Group Small Cap Growth Fund; and One Group 
Equity Income Fund. 
The methods of calculation of each eligible investor’s share of the Fair Fund are 
intended to result in a payment to each eligible investor that restores the impaired value 
of the investor’s investment in the affected mutual funds.  In the view of the IDC, 
empirical analysis of the timing transactions at issue in this proceeding indicates that, on 
the specific facts of this case, the profits measure of dilution constitutes a fair and 
reasonable technique for calculating the losses caused by the trading described in the 
Order.  Under the profits method, the harm to investors in mutual funds on any day that 
trading occurs is measured by the actual profits of the market timers on the same day.  
Profits and losses will be netted for investors within each fund, but not across funds.  No 
adjustment for transactions costs is necessary because, on the specific facts of this case, 
such an adjustment would not be likely to have a significant effect on the distribution to 
investors.  However, it is appropriate to adjust for the time value of money by 
compounding individual distributions at the six-month Treasury bill rate.   
In addition, the Order contemplates that the entire Fair Fund, which is fixed at 
$50 million plus accumulated interest, be distributed to investors.  To achieve this result, 
the IDC has developed an Allocation Algorithm which, when applied as described below, 
will calculate the percentage share of the Fair Fund that should be distributed to each 

 
 
 
10
investor who was harmed by the market timing that the Commission found wrongful.  
The Allocation Algorithm is based on the profits method and adjusts for the time value of 
money.
7
  The $50 million plus accumulated interest exceeds the amount of dilution, as 
calculated through the profits method.  Thus, investors will receive an amount more than 
the dilution directly attributable to market timing.  Based on the facts of this case, the 
additional recovery will compensate investors consistent with the terms of the Order.  
This Plan provides that the calculation of amounts to be distributed to investors 
will be based on records obtained from BOIA and certain other entities that are 
shareholders of record.  Accordingly, investors need not submit a claim in order to be 
considered for a distribution, and no claims procedure will be implemented. 
The analysis in this Plan applies only to the specific facts of this case.  Nothing 
herein should be construed as expressing any view regarding any other set of facts or any 
other matter that might come before the Commission.  The process of calculating the 
distributions to be made and of actually causing those distributions to occur will be 
implemented through a twenty-five step process.  
Step One.
  The Respondent, subject to the IDC’s supervision and in cooperation 
with BFDS, will compile a Provisional Database that contains all relevant data in 
Respondent’s custody and control for accounts that held shares of mutual funds in which 
the market timing described in the Order occurred, on the dates on which market timing 
occurred.   
This Provisional Database will include account data for three types of accounts: 
direct accounts, transparent omnibus accounts, and opaque omnibus accounts.  A direct 
                                                
 
7
 The IDC shall provide a detailed description of his methodology underlying the Allocation 
Algorithm upon request. 

 
 
 
11
account is an account where the identity of the account holder is known to Respondent 
and is not an omnibus account held by a broker or other financial intermediary.  An 
omnibus account is an account in which a financial institution serving as an intermediary 
is the shareholder of record and holds securities on behalf of the actual beneficial owners.  
An omnibus account is transparent if Respondent has access to records identifying the 
actual beneficial owners and is opaque if Respondent does not have access to such 
records.  The Provisional Database will also include information relating to known closed 
accounts.  The Provisional Database will contain information sufficient to allow 
computation of the Allocation Algorithm for all investors who are known to the 
Respondent, including holdings for each mutual fund at issue for each day on which the 
market timing at issue occurred. 
Step Two.
  Under the IDC’s direction, the Provisional Database will be validated 
for accuracy.  
Step Three.
  Under the IDC’s direction, the Allocation Algorithm will be applied 
to the Provisional Database to generate a set of provisional distribution ratios and 
corresponding provisional distribution amounts.  The distribution amounts are provisional 
in that they will be adjusted in Steps Four through Twelve below.  All provisional 
distributions that might be made to identified timer accounts, referred to in paragraphs 3 
and 4 of the Order, will be set to zero throughout the distribution process.  
Step Four.
  Under the IDC’s direction, the calculations will be validated for 
accuracy.  
Step Five.
  Under the IDC’s direction, the Respondent and BFDS will categorize 
all omnibus accounts according to whether they are opaque or transparent.  The 

 
 
 
12
Respondent and BFDS will identify all known opaque omnibus accounts with provisional 
distributions of $1,000 or more.  
Step Six.  Under the IDC’s direction, the categorization of the accounts will be 
validated for accuracy. 
Step Seven.
  Not later than thirty days after Commission approval of the Plan, 
Respondent and BFDS will, subject to IDC supervision, approach all known opaque 
omnibus intermediaries with provisional distributions of $1,000 or more.  Respondent, 
BFDS and the IDC will exercise commercially reasonable best efforts to cause those 
intermediaries to provide all data necessary to allow those intermediaries’ accounts to be 
treated as though they are transparent accounts held at Respondent.
8
  BFDS will request 
address information for all underlying shareholders of the omnibus accounts because 
such information will be necessary to implement the distribution process as described 
below.
9
  Omnibus account holders might consider the information necessary to achieve 
this result commercially sensitive.  The data will therefore be maintained exclusively by 
BFDS subject to appropriate assurances of confidentiality, and Respondent will not have 
access to those data.  Respondent will stand ready to reimburse opaque omnibus account 
holders for commercially reasonable expenses incurred in gathering and providing the 
necessary data, subject to the limitation that the amount of reimbursement will not exceed 
                                                
 
8
 In considering whether efforts are “commercially reasonable,” the IDC shall consider 
whether it is advisable to re-key data that are not in machine-readable form and consider the 
costs and benefit of such procedure. 
9
 The requested data will relate only to the first generation of account holders (that is, account 
holders whose beneficial interest is apparent from the records of the intermediary).  In cases 
where account holders in omnibus accounts are themselves omnibus accounts, BFDS will not 
seek account holder information relating to the beneficiaries of such omnibus accounts.   

 
 
 
13
the aggregate amount of the provisional distribution.
10
  Respondent and BFDS will 
maintain records of efforts made to obtain the cooperation of opaque omnibus holders 
and of the responses to these efforts.  
Step Eight.  Not later than 90 days after Commission approval of the Plan, and 
after the expenditure of reasonable efforts to obtain these data from opaque omnibus 
account holders, where all determinations as to reasonableness will be made by the IDC, 
the data obtained from the omnibus account holders will be combined with the data 
contained in the Provisional Database to create the Consolidated Master Database.  
Step Nine.
  Under the IDC’s direction, the Consolidated Master Database will be 
validated.  
Step Ten.  Under the IDC’s direction, the Allocation Algorithm will be applied to 
the Consolidated Master Database to generate provisional distributions.  
Step Eleven.
  Under the IDC’s direction, the calculations will be validated.  
Step Twelve.
  Under the IDC’s direction, a de minimis distribution amount will 
be set at $10.  In order to implement this de minimis distribution amount, Respondent and 
BFDS will apply the Gross-Up Algorithm.  The Gross-Up Algorithm requires that the 
provisional distributions be ranked in descending order of the size of the provisional 
distribution. Respondent and BFDS will then calculate the total amount of the provisional 
distributions of less than $10 (the “Aggregate de minimis Distribution”).  Respondent and 
BFDS will then provisionally redistribute the Aggregate de minimis Distribution in 
sequence to the accounts with the largest provisional distributions less than $10, 
sequentially assigning a distribution of $10 to each account until the Aggregate de 
                                                
 
10
    For a discussion of the treatment of opaque omnibus accounts that decline to provide the 
necessary data or for whom expenses of gathering and providing the necessary data are 
viewed as not being commercially reasonable, see the discussion at Step Fifteen below. 

 
 
 
14
minimis Distribution is depleted.  The Gross-Up Algorithm will thus leave unchanged all 
provisional distributions of $10 or more, and cause certain account holders with 
provisional distributions of less than $10 to receive distributions that have been grossed 
up to $10.  This procedure will also cause the de facto de minimis provisional distribution 
amount to be less than $10.  The distribution amounts determined by the application of 
the Allocation Algorithm combined with this Gross-Up Algorithm are, subject to 
validation in the next step, the Final Distribution Amounts. 
Step Thirteen
.  Under the IDC’s direction, these calculations will be validated for 
accuracy.  
Step Fourteen
.  BFDS will implement an address identification process for all 
transparent accounts, whether the account is originally a BOIA account or whether the 
account information is provided by a cooperating omnibus provider.  BFDS will compare 
all addresses for open registered account holders to the current data files at DST
11
 for any 
changes and updates that may have occurred after the original file was created by DST 
for Bank One in March of 2004.  The master database will then be updated to reflect any 
new address information.  BFDS will send all addresses for closed accounts to InfoAge, a 
research firm, in order to attempt to obtain a valid, current address.  In order to increase 
the quality of this information, BFDS will conduct the InfoAge search on a date as close 
to the mail date as is commercially reasonable.  InfoAge uses a name, past address, phone 
number or Social Security number to obtain current addresses.  The master database will 
then again be updated with the new address information.   
                                                
 
11
    DST is a publicly traded information processor that, among other services, provides mutual 
fund shareowner and unit trust recordkeeping systems. 

 
 
 
15
In order to distribute the funds, the IDC will submit a validated list of payees and 
the payment amounts, with personal identifying information redacted, to the assigned 
Commission Staff, who will obtain authorization from the Commission to disburse 
pursuant to Rule 1101(b)(6).  The payees and amounts will be validated at the IDC’s 
direction.  The validation will state that the list was compiled in accordance with the Plan 
and provides all information necessary to make disbursement to each distributee.  Unless 
otherwise directed by the Commission, the Commission Staff will direct the release of 
funds to the bank account established by the Fund Administrator (the “Escrow Account”)  
based upon the validated list and representation by the Fund Administrator that the 
checks/wires will be issued within five business days.   
Step Fifteen
.  BFDS or Respondent will cause a check to be mailed or will cause 
an electronic credit to be provided to all identified accounts within five business days of 
receiving custody of the Fair Fund.  For those payees receiving checks, BFDS will mail 
the check to the payee’s last known address as determined in Step Fourteen above.  All 
checks shall bear a stale date 90 days from the date of issue.  The IDC shall require the 
use of a positive payment system to honor checks as they are presented for payment, 
consistent with the limitations as to date and time.  The electronic credits will be made 
only to cash equivalent accounts (e.g., money market accounts).  All payments shall be 
preceded or accompanied with a communication that: (a) may, as appropriate, describe 
tax reporting and other related tax matters; (b) shall state that checks will be void after 90 
days; (c) shall provide a contact to be used in the event of any questions regarding the 
distribution; (d) indicates that the checks or electronic credits are distributions from the 

 
 
 
16
Fair Fund; and (e) shall request that any recipient who is an omnibus or collective 
account holder contact BFDS for further instructions.   
All omnibus account holders who contact BFDS will receive a further 
communication that describes steps the recipient should take in light of its status as an 
omnibus or collective account holder.
12
  For omnibus accounts held at registered broker 
dealers that receive distributions of more than $1,000, these options are: 
(a) Distribution of the proceeds to beneficiaries in the ratios that would be 
determined through the application of the distribution algorithm described in this Plan.  
Account holders who elect this alternative will be provided with information sufficient to 
allow the coding of the necessary computer algorithm.  The account holders electing this 
alternative must certify in writing to the IDC that they will distribute the proceeds to 
beneficiaries in accordance with this Plan, or they will not receive any proceeds.  
(b) Provision of all necessary data to BFDS so that BFDS could apply the 
distribution algorithm described in this Plan to the amount that has already been set to be 
distributed to that account.  Any recipient who elects this option would have to notify 
BFDS within thirty days of the mailing of the letter describing these alternatives, and 
would have to provide the necessary data in machine-readable form within a reasonable 
time period.
13
  Under this option, BFDS would perform the required calculations but the 
                                                 
12
    The omnibus communication is necessary because there may be opaque omnibus accounts 
within the omnibus accounts that are disclosed to the IDC and BFDS, even after the outreach 
effort described above. Also, there may be omnibus account holders who have declined the 
opportunity to cooperate by providing the necessary account and address information. 
13
    This alternative would not be available for accounts with distributions of less than $1,000 and 
would as a practical matter be available only for accounts that the IDC failed to recognize as 
being opaque omnibus accounts and that have distributions in excess of $1,000. 

 
 
 
17
recipient would remain responsible for the actual distribution.
 14
  The account holders 
electing this alternative must certify in writing to the IDC that they will distribute the 
proceeds to beneficiaries in accordance with this Plan. 
(c) Return the check or the credit to BFDS or simply elect not to cash the check.  
Either alternative will cause those funds to be added to the Residue Account described 
below.   
For all other omnibus account holders, these steps would include: 
(a) Application of any distribution technique that the recipient, in the exercise of 
its reasonable discretion, deems to be consistent with its fiduciary or other legal 
obligations.  
(b) Distribution of the proceeds to beneficiaries in the ratios that would be 
determined through the application of the distribution algorithm described in this Plan.  
The account holders electing this alternative must certify in writing to the IDC that they 
will distribute the proceeds to beneficiaries in accordance with this Plan, or they will not 
receive any proceeds.  Account holders who elect this alternative will be provided with 
information sufficient to allow the coding of the necessary computer algorithm. 
(c) Provision of all necessary data to BFDS so that BFDS could apply the 
distribution algorithm described in this Plan to the amount that has already been set to be 
distributed to that account.  Any recipient who elects this option would have to notify 
                                                
 
14
    As a general matter, with regard to requests from recipients that the Respondent bear the 
expenses associated with further distributions, the IDC will cooperate with all such requests 
as reasonable, and on a case by case basis, subject to the limitation that the IDC will not, 
absent extraordinary circumstance, agree to an arrangement that would require the 
expenditure of an amount that is reasonably calculated to exceed the amount of the 
distribution.  These costs will be limited to the costs incurred by working through BFDS.  
Research or other costs incurred at the omnibus account holders will be considered 
reimbursable only to the extent that those costs are commercially reasonable. 

 
 
 
18
BFDS within thirty days of the mailing of the letter describing these alternatives, and 
would have to provide the necessary data in machine-readable form within a reasonable 
time period.
15
  Under this option, BFDS would perform the required calculations but the 
recipient would remain responsible for the actual distribution.
16
  The account holders 
electing this alternative must certify in writing to the IDC that they will distribute the 
proceeds to beneficiaries in accordance with this Plan. 
(d) Return the check or the credit to BFDS or simply elect not to cash the check.  
Either alternative will cause those funds to be added to the Residue Account described 
below.   
For all non-IRA retirement accounts, other than salary reduction-only 403(b) 
accounts (“NRAs”): 
(a) BFDS, upon completing its final calculation of the 
amount to be distributed to each eligible accountholder 
and associated validations, will use best efforts to 
identify and mail notice to each NRA accountholder 
entitled to a distribution of $1,000 or more of its 
distribution amount.  Such notice will be sent via the 
United States Postal Service to the eligible 
accountholders’ last known address of record
17
; 
(b) BFDS shall use best efforts to make payments to NRAs 
after other eligible accountholders in order to allow as 
much time as practicable under the Plan for such NRA 
                                                
 
15
    This alternative would not be available for accounts with distributions of less than $1,000 and 
would as a practical matter be available only for accounts that the IDC failed to recognize as 
being opaque omnibus accounts and that have distributions in excess of $1,000. 
16
    As a general matter, with regard to requests from recipients that the Respondent bear the 
expenses associated with further distributions, the IDC will cooperate with all such requests 
as reasonable, and on a case by case basis, subject to the limitation that the IDC will not, 
absent extraordinary circumstance, agree to an arrangement that would require the 
expenditure of an amount that is reasonably calculated to exceed the amount of the 
distribution.  These costs will be limited to the costs incurred by working through BFDS.  
Research or other costs incurred at the omnibus account holders will be considered 
reimbursable only to the extent that those costs are commercially reasonable. 
17
    Returned mail will be handled using the same process as for all other mailings, as set forth in 
Step Seventeen. 

 
 
 
19
accountholders to determine a distribution methodology 
and, as appropriate, notify the plan fiduciary of the 
same. 
(c)  The record holder shall distribute the funds in 
accordance with its fiduciary, contractual, and/or legal 
obligations, and consistent with guidance issued by the 
Department of Labor, if any.   
Subject to the foregoing: 
(i) a service provider (other than a plan sponsor) may 
allocate the proceeds it receives pursuant to the Plan 
among the non-IRA retirement plans (“NRPs”) 
according to average share or dollar balance of the 
NRPs’ investment in the One Group Funds during the 
relevant period; and 
(ii) proceeds attributable to a particular NRP may  (1) 
be allocated to current participants pro rata based upon 
their current total balance in the affected NRP, or (2) to 
the extent permitted by the NRP, be used to pay 
reasonable expenses of administering the NRP. 
No money shall be distributed pursuant to the Distribution Plan prior to the 
receipt of the Ruling by the IRS in connection with the Private Letter Ruling currently 
being sought by the Tax Administrator (the “IRS Ruling”). 
In the event that the IRS Ruling does not require reporting of any distributions 
made pursuant to the Distribution Plan, and provided that the Commission has approved 
the Distribution Plan, the period for omnibus outreach has expired, and that the Fund 
Administrator has completed its final calculation of the amount to be distributed to each 
eligible accountholder and associated validations, the Fund Administrator will use its best 
efforts to:  (i) start the distribution within two weeks of the date of its receipt of the IRS 
Ruling, and (ii) complete the distribution within four months of the transfer of the final 
payment population to the Escrow Account. 

 
 
 
20
In the event the IRS Ruling requires reporting of all or a portion of the 
distributions made pursuant to the Distribution Plan, and provided that the Commission 
has approved the Distribution Plan, the period for omnibus outreach has expired, and the 
Fund Administrator has completed its final calculation of the amount to be distributed to 
each eligible accountholder and associated validations, the Fund Administrator will use 
its best efforts to:  (i) start the distribution within two weeks of the deadline for returning 
any back-up withholding or other tax forms from eligible investors required by the IRS 
Ruling, and (ii) complete the distribution within four months of the transfer of the final 
payment population to the Escrow Account. 
Step Sixteen.
  Customer support and communications programs to be 
administered by BFDS will go live at the time the first distribution occurs.  BFDS will 
provide a toll free number and a website to the public.  The Commission retains the right 
to review and approve any material posted on the website.  Disputes will be handled by 
the customer support staff and reviewed as necessary by the IDC, whose determination 
shall be final. 
Step Seventeen.
  Returned mail and checks will be handled as follows:  
(a) All mail returned by the United States Postal Service (“USPS”) for which a 
new forwarding address has been provided by the USPS will be immediately repackaged 
and sent to the new address.  The master database will be updated with the new address.  
(b) All mail returned by the USPS for the first time, without a new forwarding 
address, will be coded as returned mail, the check will be voided, and current account 
information forwarded to InfoAge for address research.  If a new address is found, that 
address will be updated to the master database and a new check will be issued.  If no new 

 
 
 
21
address is found, the original check will remain voided.  Additional efforts to identify the 
addresses of recipients will be conducted as is commercially reasonable in the view of the 
IDC, where the costs of further research and the amount to be distributed will be 
considered, subject to an initial rebuttable presumption that the additional costs of 
distribution will not exceed the amount to be distributed.  
(c) All mail returned by the USPS from a second attempt mailing, for which a 
new forwarding address has been provided by the USPS, will be immediately repackaged 
and sent to that new address.  The master database will be updated with the new address.  
(d) All mail returned by the USPS from a second attempt mailing, without a new 
forwarding address, will be coded as returned mail and the check will be voided. 
Additional efforts to identify the addresses of recipients will be conducted as is 
commercially reasonable in the view of the IDC, where the costs of further research and 
the amount to be distributed will be considered, subject to an initial rebuttable 
presumption that the additional costs of distribution will not exceed the amount to be 
distributed.  
Step Eighteen.
  Under the IDC’s direction, Steps Fifteen through Seventeen will 
be validated.  
Step Nineteen.  The IDC shall declare the implementation of the Distribution 
Process complete 120 days after completing the last mailing required pursuant to the 
protocol described in Step Seventeen.  This 120-day period constitutes the 90-day period 
during which the check is valid plus a 30-day grace period. 
Step Twenty.
  The value of all checks not cashed, returned distributions, 
distributions to account holders who cannot be identified, or interest accrued on these 

 
 
 
22
accounts after the end of this 120-day period will be contributed to or remain in the 
Residue Account at Eastern Bank.  
Step Twenty-One.  Under the IDC’s direction, the balance in the Residue 
Account will be validated.  
Step Twenty-Two.
  Under the IDC’s direction, BFDS will allocate the Residue 
Account among the eleven affected funds in the same ratio as would be calculated 
through the application of the distribution algorithm, without regard to the gross-up 
protocol.  
Step Twenty-Three.
  Under the IDC’s direction, the Residue Account allocation 
calculations and distributions into the fund will be validated.  
Step Twenty-Four.  Under the IDC’s direction, BFDS will transfer funds from 
the Residue Account to the affected funds.  All funds, including accrued interest as of the 
date of the implementation of this step will then be fully distributed.  
Step Twenty-Five.
  The IDC will declare that the distribution is concluded.  
BFDS will file within 30 days an accounting with the Commission as required by Rule 
1105(f).
18
  The Fair Fund shall terminate effective June 30, 2007 or 30 days after the final 
distribution to shareholders and the resolution of uncashed or unclaimed checks as 
described above, whichever is later.  Prior to the termination of the Fair Fund, the 
Respondent shall cooperate with the Tax Administrator to make adequate 
accommodation for tax liability and for the costs of tax compliance.  Upon termination as 
defined in this paragraph, all undistributed assets remaining in the Fair Fund shall be 
remitted to Treasury.   
                                                
 
18
    In addition, while the distribution is ongoing, BFDS will file an accounting during the first 
ten days of each calendar quarter, or as otherwise directed by the Commission.  BFDS will 
submit a final accounting for approval of the Commission, as required by Rule 1105(f).   

 
 
 
23
For good cause shown, the Commission’s Staff may extend any of the procedural 
dates set forth in this Plan. 
The IDC will inform the Commission Staff of any material changes in the Plan, 
and will obtain approval from the Commission prior to their implementation.  If material 
changes are required, this Plan may be amended upon the motion of the Respondent, the 
Fund Administrator or upon the Commission’s own motion. 

 
 
 
24
 
Submitted on February 20, 2007 
 
 
By: ________________/s/______________ 
Joseph A. Grundfest 
IDC for Banc One Investment Advisors 
Corporation 

UNITED STATES OF AMERICA 
Before the 

SECURITIES AND EXCHANGE COMMISSION 
 
 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-11530 

____________________________________ 
      ) 
In the matter of     ) 
      ) 
BANC ONE INVESTMENT   ) 
ADVISORS CORPORATION    ) 
      ) 
  and    ) 
      ) 
MARK A. BEESON,    ) 
      ) 
Respondents.     ) 
____________________________________) 
 

 

MODIFIED PLAN OF DISTRIBUTION 



 

 
 2

OVERVIEW 

This Plan of Distribution (the “Plan”) proposes a methodology for distributing to 

investors $50 million, plus accumulated interest, paid by Banc One Investment Advisors 

Corporation (“BOIA” or “Respondent”) in settlement of administrative proceedings 

addressing market-timing of mutual funds advised by BOIA.1   

On June 29, 2004, BOIA consented to the entry of an Order Instituting 

Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing 

Remedial Sanctions and a Cease-and-Desist Order (the “Order”), without admitting or 

denying the Order’s findings.  The Order found, among other things, that BOIA allowed 

excessive short-term trading in certain One Group Mutual Funds (“One Group”) from 

June 1999 through May 2003 that was inconsistent with fund prospectuses and 

potentially harmful to One Group shareholders. 

The Order required, among other things, that BOIA pay disgorgement of 

$10 million and civil penalties of $40 million, for a total payment of $50 million, and 

establish a Fair Fund under Section 308(a) of the Sarbanes-Oxley Act to provide for the 

ultimate distribution of funds to investors.  The Order further required that BOIA retain 

“the services of an Independent Distribution Consultant not unacceptable to the staff of 

the Commission and a majority of the independent members of the One Group Board of 

                                                 
1 As of June 29, 2004, BOIA was an Ohio corporation, headquartered in Columbus, Ohio, that 

was registered with the Commission as an investment adviser on November 22, 1991.  BOIA 
was a wholly owned subsidiary of Bank One, National Association (Ohio), which in turn was 
a wholly owned subsidiary of Bank One Corporation (“Bank One”), a multi-state bank 
holding company headquartered in Chicago, Illinois.  BOIA provided discretionary 
investment management services to individuals and companies, including the One Group 
family of mutual funds, Bank One’s mutual-fund complex.  Since the entry of the Order, 
Bank One and JPMorgan Chase & Co. have merged and their organizational structures have 
not survived the merger in their entirety.  The changes in structure caused by the merger do 
not, however, affect the analysis, operation or implementation of the Plan. 



 

 
 3

Trustees” and that it “cooperate fully with the Independent Distribution Consultant and 

shall provide the Independent Distribution Consultant with access to its files, books, 

records, and personnel as reasonably requested for the review.”2  The Order also directed 

that “BOIA shall require that the Independent Distribution Consultant develop a 

Distribution Plan for the distribution of all of the disgorgement and penalties to be paid 

by BOIA pursuant to this Order, and any interest or earnings thereon, according to a 

methodology developed in consultation with BOIA and acceptable to the Staff of the 

Commission and the independent Trustees of the One Group funds.”3  The Respondent 

has agreed to pay all costs associated with the administration of the Distribution Plan, 

including any tax liability and tax compliance costs for the Qualified Settlement Fund 

(“QSF”).4   

In accordance with the Order, Respondent has retained Professor Joseph A. 

Grundfest, a professor of law at Stanford Law School and a former SEC commissioner, 

as the Independent Distribution Consultant (“IDC”).  This submission constitutes the Plan 

of Distribution required by the Order.  The Plan is subject to approval by the Commission 

and the Commission will retain jurisdiction over the implementation of the Plan.   

ADMINISTRATION OF THE PLAN 

Appointment of an Administrator for the Fair Fund 

The Commission’s Order requires that the IDC submit a Plan for the 

“administration and distribution of disgorgement and penalty funds pursuant to 

Rule 1101 of the Commission’s Rules of Practice.”5  Rule 1105(a) of the Commission’s 

                                                 
2 Order at ¶34. 
3 Id. 
4 See also footnotes 14 and 16. 
5 Order at ¶ 34. 



 

 
 4

Rules of Practice (“Rules”) provides that the Commission “shall have discretion to 

appoint any person … as administrator of a plan of disgorgement or a Fair Fund plan and 

to delegate to that person responsibility for administering the plan.”  Accordingly, the 

IDC proposes that the Commission appoint Boston Financial Data Services, Inc. 

(“BFDS”) to serve as the administrator of the Fair Fund (“Fund Administrator”).   

BFDS, founded in 1973, is a third-party service provider that provides transfer 

agency services to over 145 fund companies.  Under the supervision of the IDC, BFDS’s 

responsibilities will include, among other things: overseeing administration of the Fair 

Fund, obtaining accurate mailing information for shareholders, preparing accountings, 

providing information necessary to accomplish the income tax compliance, ruling and 

advice work assigned to any Tax Administrator appointed by the Commission,  

distributing money from the Fair Fund to shareholders in accordance with this Plan, and 

setting up and staffing a call center to address shareholder questions or concerns 

regarding the distribution.  The IDC and BFDS currently have an agreement in place 

requiring BFDS to perform certain tasks in preparation for the forthcoming distribution of 

the Fair Fund.  To date, BFDS has successfully met its obligations under the agreement 

and the IDC believes that BFDS will perform satisfactorily as the Fund Administrator.   

Because BFDS is not a “Commission employee,” Rule 1105(c) requires that “the 

administrator shall … obtain a bond in the manner prescribed in 11 U.S.C. 322, in an 

amount to be approved by the Commission,” but that “the Commission may waive 

posting of a bond for good cause shown.”  The IDC proposes that the bond requirement 

for BFDS be waived. 



 

 
 5

Good cause exists to waive posting of a bond, because BFDS maintains sufficient 

insurance coverage against loss.  BFDS maintains, and will maintain until termination of 

the Fair Fund, a Financial Institutions Bond, a Computer Crime Policy and Errors and 

Omissions insurance.  The Financial Institutions Bond provides protection against, 

among other things, employee dishonesty, and forgery or fraudulent alteration of 

securities and negotiable instruments.  The Computer Crime Policy provides protection 

against, among other things, computer systems fraud, transfer fraud and destruction of 

data or programs by hackers or viruses.  The Errors and Omissions insurance protects 

against errors and omissions committed by employees in the course of their performance 

of professional services.  The insurance policies maintained by BFDS have been provided 

to the assigned Commission Staff for review and have been deemed “not unacceptable.”  

Under the Plan, $55,000,000 is the maximum amount that will be under BFDS’ custody 

and control. 

The IDC also proposes that the Fair Fund assets be held during the check-cashing 

period at Eastern Bank, a Massachusetts Chartered Mutual Bank (“Eastern Bank”).  

Eastern Bank maintains a Financial Institutions (FI) Bond including errors and omissions 

coverage.  The primary insurers are St. Paul Mercury Insurance Co., a member of the St. 

Paul Travelers Companies which, as of their most recent renewal, was rated A+ by A.M. 

Best, and Federal Insurance Company (Chubb), a member of the Chubb Group of 

Insurance Companies which, as of their most recent renewal, was rated A++ by A.M. 

Best.  Eastern Bank annually assesses the adequacy of its policy limits through extensive 

analysis of historical loss data, exposure to loss and internal company controls.  Eastern 

Bank’s limits are reviewed annually by its Board of Directors. 



 

 
 6

Control of the Fair Fund 

Pursuant to the Order, on July 16, 2004, BOIA paid a total of $50 million into an 

escrow account at Citibank, N.A. to be invested in short-term United States Treasury 

Securities with maturities not to exceed six months.  On September 29, 2005, the SEC 

issued an Order Directing Escrow Agent To Transmit Funds (the “September 29 Order”) 

which directed that, upon the maturity of the securities held in the escrow account, the 

Escrow Agent, Citibank, N.A., transfer the monies in the escrow account to the Office of 

Financial Management at the SEC.  Accordingly, on January 12, 2006, in accordance 

with the September 29 Order, the Escrow Agent wired the monies to the SEC.   

The Commission has custody of the Fair Fund and shall retain control of the 

assets of the Fair Fund.  The Fair Fund is currently deposited at the U.S. Treasury Bureau 

of Public Debt (“BPD”) and will remain there until released in accordance with Step 

Fourteen below.  This Fair Fund will not receive additional funds, other than the interest 

from the funds on deposit at the BPD.   

The Fair Fund constitutes a QSF under Section 468B(g) of the Internal Revenue 

Code, 26 U.S.C. §468B(g), and related regulations, 26 C.F.R. §§1.468B-1 through 

1.468B-5.  Upon approval of the Plan, BFDS shall establish an account at Eastern Bank 

in the name of and bearing the Taxpayer Identification Number of the QSF.  Following 

approval of the Plan, and the IDC’s satisfaction of the requirements of Step Fourteen 

below, the Commission Staff shall cause the balance in the Fair Fund to be deposited in 

the account established by BFDS at Eastern Bank.  If appropriate, the release of funds to 

the account established by BFDS shall be staged in order to assure that neither BFDS nor 

Eastern Bank, at any time, have access to monies belonging to the Fair Fund in excess of 



 

 
 7

their applicable insurance coverage.  The QSF account shall be invested in direct 

obligations of the United States Government of a type and term necessary to meet the 

cash requirements of the payments to investors, tax obligations and fees.  BFDS shall be 

the signer on the QSF account, subject to the continuing jurisdiction and control of the 

Commission.   

Tax Obligations Of The Fair Fund 

The IDC and BFDS shall authorize Eastern Bank to provide account information 

to Damasco & Associates, appointed by the Commission as the Tax Administrator of the 

Fair Fund (“Tax Administrator”), pursuant to the March 10, 2006 Order Appointing Tax 

Administrator (Release No. 53468, Admin. Proc. File No. 3-11530).  The IDC and BFDS 

will cooperate with the Tax Administrator in providing information necessary to 

accomplish the income tax compliance, ruling and advice work assigned to the Tax 

Administrator by the Commission.  Respondent shall provide the Tax Administrator with 

funds to pay tax liability and tax compliance costs.  BFDS shall authorize Eastern Bank 

to provide duplicate bank statements for the QSF account directly to the IDC, the Tax 

Administrator and Robert J. Burson, Senior Associate Regional Director, Securities and 

Exchange Commission, 175 West Jackson Blvd., Chicago, IL 60604.   

Neither the IDC nor BFDS will provide tax advice to any investors receiving 

distributions from the Fair Fund.  In the event that the Internal Revenue Service issues 

guidance regarding the distribution, access to that guidance will be provided along with 

the other information to investors described in Step Fifteen below. 



 

 
 8

Limitation on Liability 

 The IDC and the Fund Administrator, and/or each of their designees, agents and 

assistants, shall be entitled to rely on any Orders issued in this proceeding by the 

Commission, the Secretary by delegated authority, or an Administrative Law Judge, and 

may not be held liable to any person other than other than the Commission or the QSF for 

any act or omission in the course of administering the Fair Fund, except upon a finding 

that such act or omission is caused by such party’s gross negligence, bad faith or willful 

misconduct, reckless disregard of duty, or reckless failure to comply with the terms of the 

Plan.  This paragraph is an expression of the IDC’s and the Fund Administrator’s 

standard of care and is not intended, nor should it be deemed to be, a representation to or 

an indemnification of the IDC or the Fund Administrator or their designees, agents and 

assistants by the Commission or the QSF, nor should this paragraph preclude the 

Commission or the QSF from seeking redress from IDC or the Fund Administrator in 

accordance with the rules and regulations of the Commission and the QSF. 

DISTRIBUTION PLAN AND PROCEDURES 

The Order requires that the IDC develop a Plan that “provide[s] for investors to 

receive, in order of priority, (i) their proportionate share of losses from market-timing, 

and (ii) a proportionate share of advisory fees paid by funds that suffered such losses 

during the period of such market timing.”6  Investors eligible to receive a share of the 

Fair Fund are those investors who held shares in the following mutual funds in which 

market timing occurred, on the days on which such market timing occurred, during the 

period from June 1999 through May 2003, except the identified timers referred to in 

                                                 
6 Order at ¶ 34. 



 

 
 9

paragraphs 3 and 4 of the Order:  One Group Mid Cap Growth Fund; One Group Large 

Cap Growth Fund; One Group Diversified Equity Fund; One Group Mid Cap Value 

Fund; One Group Large Cap Value Fund; One Group Diversified Mid Cap Fund; One 

Group Small Cap Value; One Group Diversified International Fund; One Group 

International Equity Index Fund; One Group Small Cap Growth Fund; and One Group 

Equity Income Fund. 

The methods of calculation of each eligible investor’s share of the Fair Fund are 

intended to result in a payment to each eligible investor that restores the impaired value 

of the investor’s investment in the affected mutual funds.  In the view of the IDC, 

empirical analysis of the timing transactions at issue in this proceeding indicates that, on 

the specific facts of this case, the profits measure of dilution constitutes a fair and 

reasonable technique for calculating the losses caused by the trading described in the 

Order.  Under the profits method, the harm to investors in mutual funds on any day that 

trading occurs is measured by the actual profits of the market timers on the same day.  

Profits and losses will be netted for investors within each fund, but not across funds.  No 

adjustment for transactions costs is necessary because, on the specific facts of this case, 

such an adjustment would not be likely to have a significant effect on the distribution to 

investors.  However, it is appropriate to adjust for the time value of money by 

compounding individual distributions at the six-month Treasury bill rate.   

In addition, the Order contemplates that the entire Fair Fund, which is fixed at 

$50 million plus accumulated interest, be distributed to investors.  To achieve this result, 

the IDC has developed an Allocation Algorithm which, when applied as described below, 

will calculate the percentage share of the Fair Fund that should be distributed to each 



 

 
 10

investor who was harmed by the market timing that the Commission found wrongful.  

The Allocation Algorithm is based on the profits method and adjusts for the time value of 

money.7  The $50 million plus accumulated interest exceeds the amount of dilution, as 

calculated through the profits method.  Thus, investors will receive an amount more than 

the dilution directly attributable to market timing.  Based on the facts of this case, the 

additional recovery will compensate investors consistent with the terms of the Order.  

This Plan provides that the calculation of amounts to be distributed to investors 

will be based on records obtained from BOIA and certain other entities that are 

shareholders of record.  Accordingly, investors need not submit a claim in order to be 

considered for a distribution, and no claims procedure will be implemented. 

The analysis in this Plan applies only to the specific facts of this case.  Nothing 

herein should be construed as expressing any view regarding any other set of facts or any 

other matter that might come before the Commission.  The process of calculating the 

distributions to be made and of actually causing those distributions to occur will be 

implemented through a twenty-five step process.  

Step One.  The Respondent, subject to the IDC’s supervision and in cooperation 

with BFDS, will compile a Provisional Database that contains all relevant data in 

Respondent’s custody and control for accounts that held shares of mutual funds in which 

the market timing described in the Order occurred, on the dates on which market timing 

occurred.   

This Provisional Database will include account data for three types of accounts: 

direct accounts, transparent omnibus accounts, and opaque omnibus accounts.  A direct 

                                                 
7 The IDC shall provide a detailed description of his methodology underlying the Allocation 

Algorithm upon request. 



 

 
 11

account is an account where the identity of the account holder is known to Respondent 

and is not an omnibus account held by a broker or other financial intermediary.  An 

omnibus account is an account in which a financial institution serving as an intermediary 

is the shareholder of record and holds securities on behalf of the actual beneficial owners.  

An omnibus account is transparent if Respondent has access to records identifying the 

actual beneficial owners and is opaque if Respondent does not have access to such 

records.  The Provisional Database will also include information relating to known closed 

accounts.  The Provisional Database will contain information sufficient to allow 

computation of the Allocation Algorithm for all investors who are known to the 

Respondent, including holdings for each mutual fund at issue for each day on which the 

market timing at issue occurred. 

Step Two.  Under the IDC’s direction, the Provisional Database will be validated 

for accuracy.  

Step Three.  Under the IDC’s direction, the Allocation Algorithm will be applied 

to the Provisional Database to generate a set of provisional distribution ratios and 

corresponding provisional distribution amounts.  The distribution amounts are provisional 

in that they will be adjusted in Steps Four through Twelve below.  All provisional 

distributions that might be made to identified timer accounts, referred to in paragraphs 3 

and 4 of the Order, will be set to zero throughout the distribution process.  

Step Four.  Under the IDC’s direction, the calculations will be validated for 

accuracy.  

Step Five.  Under the IDC’s direction, the Respondent and BFDS will categorize 

all omnibus accounts according to whether they are opaque or transparent.  The 



 

 
 12

Respondent and BFDS will identify all known opaque omnibus accounts with provisional 

distributions of $1,000 or more.  

Step Six.  Under the IDC’s direction, the categorization of the accounts will be 

validated for accuracy. 

Step Seven.  Not later than thirty days after Commission approval of the Plan, 

Respondent and BFDS will, subject to IDC supervision, approach all known opaque 

omnibus intermediaries with provisional distributions of $1,000 or more.  Respondent, 

BFDS and the IDC will exercise commercially reasonable best efforts to cause those 

intermediaries to provide all data necessary to allow those intermediaries’ accounts to be 

treated as though they are transparent accounts held at Respondent.8  BFDS will request 

address information for all underlying shareholders of the omnibus accounts because 

such information will be necessary to implement the distribution process as described 

below.9  Omnibus account holders might consider the information necessary to achieve 

this result commercially sensitive.  The data will therefore be maintained exclusively by 

BFDS subject to appropriate assurances of confidentiality, and Respondent will not have 

access to those data.  Respondent will stand ready to reimburse opaque omnibus account 

holders for commercially reasonable expenses incurred in gathering and providing the 

necessary data, subject to the limitation that the amount of reimbursement will not exceed 

                                                 
8 In considering whether efforts are “commercially reasonable,” the IDC shall consider 

whether it is advisable to re-key data that are not in machine-readable form and consider the 
costs and benefit of such procedure. 

9 The requested data will relate only to the first generation of account holders (that is, account 
holders whose beneficial interest is apparent from the records of the intermediary).  In cases 
where account holders in omnibus accounts are themselves omnibus accounts, BFDS will not 
seek account holder information relating to the beneficiaries of such omnibus accounts.   



 

 
 13

the aggregate amount of the provisional distribution.10  Respondent and BFDS will 

maintain records of efforts made to obtain the cooperation of opaque omnibus holders 

and of the responses to these efforts.  

Step Eight.  Not later than 90 days after Commission approval of the Plan, and 

after the expenditure of reasonable efforts to obtain these data from opaque omnibus 

account holders, where all determinations as to reasonableness will be made by the IDC, 

the data obtained from the omnibus account holders will be combined with the data 

contained in the Provisional Database to create the Consolidated Master Database.  

Step Nine.  Under the IDC’s direction, the Consolidated Master Database will be 

validated.  

Step Ten.  Under the IDC’s direction, the Allocation Algorithm will be applied to 

the Consolidated Master Database to generate provisional distributions.  

Step Eleven.  Under the IDC’s direction, the calculations will be validated.  

Step Twelve.  Under the IDC’s direction, a de minimis distribution amount will 

be set at $10.  In order to implement this de minimis distribution amount, Respondent and 

BFDS will apply the Gross-Up Algorithm.  The Gross-Up Algorithm requires that the 

provisional distributions be ranked in descending order of the size of the provisional 

distribution. Respondent and BFDS will then calculate the total amount of the provisional 

distributions of less than $10 (the “Aggregate de minimis Distribution”).  Respondent and 

BFDS will then provisionally redistribute the Aggregate de minimis Distribution in 

sequence to the accounts with the largest provisional distributions less than $10, 

sequentially assigning a distribution of $10 to each account until the Aggregate de 
                                                 
10 For a discussion of the treatment of opaque omnibus accounts that decline to provide the 

necessary data or for whom expenses of gathering and providing the necessary data are 
viewed as not being commercially reasonable, see the discussion at Step Fifteen below. 



 

 
 14

minimis Distribution is depleted.  The Gross-Up Algorithm will thus leave unchanged all 

provisional distributions of $10 or more, and cause certain account holders with 

provisional distributions of less than $10 to receive distributions that have been grossed 

up to $10.  This procedure will also cause the de facto de minimis provisional distribution 

amount to be less than $10.  The distribution amounts determined by the application of 

the Allocation Algorithm combined with this Gross-Up Algorithm are, subject to 

validation in the next step, the Final Distribution Amounts. 

Step Thirteen.  Under the IDC’s direction, these calculations will be validated for 

accuracy.  

Step Fourteen.  BFDS will implement an address identification process for all 

transparent accounts, whether the account is originally a BOIA account or whether the 

account information is provided by a cooperating omnibus provider.  BFDS will compare 

all addresses for open registered account holders to the current data files at DST11 for any 

changes and updates that may have occurred after the original file was created by DST 

for Bank One in March of 2004.  The master database will then be updated to reflect any 

new address information.  BFDS will send all addresses for closed accounts to InfoAge, a 

research firm, in order to attempt to obtain a valid, current address.  In order to increase 

the quality of this information, BFDS will conduct the InfoAge search on a date as close 

to the mail date as is commercially reasonable.  InfoAge uses a name, past address, phone 

number or Social Security number to obtain current addresses.  The master database will 

then again be updated with the new address information.   

                                                 
11 DST is a publicly traded information processor that, among other services, provides mutual 

fund shareowner and unit trust recordkeeping systems. 



 

 
 15

In order to distribute the funds, the IDC will submit a validated list of payees and 

the payment amounts, with personal identifying information redacted, to the assigned 

Commission Staff, who will obtain authorization from the Commission to disburse 

pursuant to Rule 1101(b)(6).  The payees and amounts will be validated at the IDC’s 

direction.  The validation will state that the list was compiled in accordance with the Plan 

and provides all information necessary to make disbursement to each distributee.  Unless 

otherwise directed by the Commission, the Commission Staff will direct the release of 

funds to the bank account established by the Fund Administrator (the “Escrow Account”)  

based upon the validated list and representation by the Fund Administrator that the 

checks/wires will be issued within five business days.   

Step Fifteen.  BFDS or Respondent will cause a check to be mailed or will cause 

an electronic credit to be provided to all identified accounts within five business days of 

receiving custody of the Fair Fund.  For those payees receiving checks, BFDS will mail 

the check to the payee’s last known address as determined in Step Fourteen above.  All 

checks shall bear a stale date 90 days from the date of issue.  The IDC shall require the 

use of a positive payment system to honor checks as they are presented for payment, 

consistent with the limitations as to date and time.  The electronic credits will be made 

only to cash equivalent accounts (e.g., money market accounts).  All payments shall be 

preceded or accompanied with a communication that: (a) may, as appropriate, describe 

tax reporting and other related tax matters; (b) shall state that checks will be void after 90 

days; (c) shall provide a contact to be used in the event of any questions regarding the 

distribution; (d) indicates that the checks or electronic credits are distributions from the 



 

 
 16

Fair Fund; and (e) shall request that any recipient who is an omnibus or collective 

account holder contact BFDS for further instructions.   

All omnibus account holders who contact BFDS will receive a further 

communication that describes steps the recipient should take in light of its status as an 

omnibus or collective account holder.12  For omnibus accounts held at registered broker 

dealers that receive distributions of more than $1,000, these options are: 

(a) Distribution of the proceeds to beneficiaries in the ratios that would be 

determined through the application of the distribution algorithm described in this Plan.  

Account holders who elect this alternative will be provided with information sufficient to 

allow the coding of the necessary computer algorithm.  The account holders electing this 

alternative must certify in writing to the IDC that they will distribute the proceeds to 

beneficiaries in accordance with this Plan, or they will not receive any proceeds.  

(b) Provision of all necessary data to BFDS so that BFDS could apply the 

distribution algorithm described in this Plan to the amount that has already been set to be 

distributed to that account.  Any recipient who elects this option would have to notify 

BFDS within thirty days of the mailing of the letter describing these alternatives, and 

would have to provide the necessary data in machine-readable form within a reasonable 

time period.13  Under this option, BFDS would perform the required calculations but the 

                                                 
12  The omnibus communication is necessary because there may be opaque omnibus accounts 

within the omnibus accounts that are disclosed to the IDC and BFDS, even after the outreach 
effort described above. Also, there may be omnibus account holders who have declined the 
opportunity to cooperate by providing the necessary account and address information. 

13  This alternative would not be available for accounts with distributions of less than $1,000 and 
would as a practical matter be available only for accounts that the IDC failed to recognize as 
being opaque omnibus accounts and that have distributions in excess of $1,000. 



 

 
 17

recipient would remain responsible for the actual distribution. 14  The account holders 

electing this alternative must certify in writing to the IDC that they will distribute the 

proceeds to beneficiaries in accordance with this Plan. 

(c) Return the check or the credit to BFDS or simply elect not to cash the check.  

Either alternative will cause those funds to be added to the Residue Account described 

below.   

For all other omnibus account holders, these steps would include: 

(a) Application of any distribution technique that the recipient, in the exercise of 

its reasonable discretion, deems to be consistent with its fiduciary or other legal 

obligations.  

(b) Distribution of the proceeds to beneficiaries in the ratios that would be 

determined through the application of the distribution algorithm described in this Plan.  

The account holders electing this alternative must certify in writing to the IDC that they 

will distribute the proceeds to beneficiaries in accordance with this Plan, or they will not 

receive any proceeds.  Account holders who elect this alternative will be provided with 

information sufficient to allow the coding of the necessary computer algorithm. 

(c) Provision of all necessary data to BFDS so that BFDS could apply the 

distribution algorithm described in this Plan to the amount that has already been set to be 

distributed to that account.  Any recipient who elects this option would have to notify 

                                                 
14  As a general matter, with regard to requests from recipients that the Respondent bear the 

expenses associated with further distributions, the IDC will cooperate with all such requests 
as reasonable, and on a case by case basis, subject to the limitation that the IDC will not, 
absent extraordinary circumstance, agree to an arrangement that would require the 
expenditure of an amount that is reasonably calculated to exceed the amount of the 
distribution.  These costs will be limited to the costs incurred by working through BFDS.  
Research or other costs incurred at the omnibus account holders will be considered 
reimbursable only to the extent that those costs are commercially reasonable. 



 

 
 18

BFDS within thirty days of the mailing of the letter describing these alternatives, and 

would have to provide the necessary data in machine-readable form within a reasonable 

time period.15  Under this option, BFDS would perform the required calculations but the 

recipient would remain responsible for the actual distribution.16  The account holders 

electing this alternative must certify in writing to the IDC that they will distribute the 

proceeds to beneficiaries in accordance with this Plan. 

(d) Return the check or the credit to BFDS or simply elect not to cash the check.  

Either alternative will cause those funds to be added to the Residue Account described 

below.   

For all non-IRA retirement accounts, other than salary reduction-only 403(b) 

accounts (“NRAs”): 

(a) BFDS, upon completing its final calculation of the 
amount to be distributed to each eligible accountholder 
and associated validations, will use best efforts to 
identify and mail notice to each NRA accountholder 
entitled to a distribution of $1,000 or more of its 
distribution amount.  Such notice will be sent via the 
United States Postal Service to the eligible 
accountholders’ last known address of record17; 

(b) BFDS shall use best efforts to make payments to NRAs 
after other eligible accountholders in order to allow as 
much time as practicable under the Plan for such NRA 

                                                 
15  This alternative would not be available for accounts with distributions of less than $1,000 and 

would as a practical matter be available only for accounts that the IDC failed to recognize as 
being opaque omnibus accounts and that have distributions in excess of $1,000. 

16 As a general matter, with regard to requests from recipients that the Respondent bear the 
expenses associated with further distributions, the IDC will cooperate with all such requests 
as reasonable, and on a case by case basis, subject to the limitation that the IDC will not, 
absent extraordinary circumstance, agree to an arrangement that would require the 
expenditure of an amount that is reasonably calculated to exceed the amount of the 
distribution.  These costs will be limited to the costs incurred by working through BFDS.  
Research or other costs incurred at the omnibus account holders will be considered 
reimbursable only to the extent that those costs are commercially reasonable. 

17  Returned mail will be handled using the same process as for all other mailings, as set forth in 
Step Seventeen. 



 

 
 19

accountholders to determine a distribution methodology 
and, as appropriate, notify the plan fiduciary of the 
same. 

(c)  The record holder shall distribute the funds in 
accordance with its fiduciary, contractual, and/or legal 
obligations, and consistent with guidance issued by the 
Department of Labor, if any.   

Subject to the foregoing: 

(i) a service provider (other than a plan sponsor) may 
allocate the proceeds it receives pursuant to the Plan 
among the non-IRA retirement plans (“NRPs”) 
according to average share or dollar balance of the 
NRPs’ investment in the One Group Funds during the 
relevant period; and 

(ii) proceeds attributable to a particular NRP may  (1) 
be allocated to current participants pro rata based upon 
their current total balance in the affected NRP, or (2) to 
the extent permitted by the NRP, be used to pay 
reasonable expenses of administering the NRP. 

No money shall be distributed pursuant to the Distribution Plan prior to the 

receipt of the Ruling by the IRS in connection with the Private Letter Ruling currently 

being sought by the Tax Administrator (the “IRS Ruling”). 

In the event that the IRS Ruling does not require reporting of any distributions 

made pursuant to the Distribution Plan, and provided that the Commission has approved 

the Distribution Plan, the period for omnibus outreach has expired, and that the Fund 

Administrator has completed its final calculation of the amount to be distributed to each 

eligible accountholder and associated validations, the Fund Administrator will use its best 

efforts to:  (i) start the distribution within two weeks of the date of its receipt of the IRS 

Ruling, and (ii) complete the distribution within four months of the transfer of the final 

payment population to the Escrow Account. 



 

 
 20

In the event the IRS Ruling requires reporting of all or a portion of the 

distributions made pursuant to the Distribution Plan, and provided that the Commission 

has approved the Distribution Plan, the period for omnibus outreach has expired, and the 

Fund Administrator has completed its final calculation of the amount to be distributed to 

each eligible accountholder and associated validations, the Fund Administrator will use 

its best efforts to:  (i) start the distribution within two weeks of the deadline for returning 

any back-up withholding or other tax forms from eligible investors required by the IRS 

Ruling, and (ii) complete the distribution within four months of the transfer of the final 

payment population to the Escrow Account. 

Step Sixteen.  Customer support and communications programs to be 

administered by BFDS will go live at the time the first distribution occurs.  BFDS will 

provide a toll free number and a website to the public.  The Commission retains the right 

to review and approve any material posted on the website.  Disputes will be handled by 

the customer support staff and reviewed as necessary by the IDC, whose determination 

shall be final. 

Step Seventeen.  Returned mail and checks will be handled as follows:  

(a) All mail returned by the United States Postal Service (“USPS”) for which a 

new forwarding address has been provided by the USPS will be immediately repackaged 

and sent to the new address.  The master database will be updated with the new address.  

(b) All mail returned by the USPS for the first time, without a new forwarding 

address, will be coded as returned mail, the check will be voided, and current account 

information forwarded to InfoAge for address research.  If a new address is found, that 

address will be updated to the master database and a new check will be issued.  If no new21

address is found, the original check will remain voided.  Additional efforts to identify the 

addresses of recipients will be conducted as is commercially reasonable in the view of the 

IDC, where the costs of further research and the amount to be distributed will be 

considered, subject to an initial rebuttable presumption that the additional costs of 

distribution will not exceed the amount to be distributed.  

(c) All mail returned by the USPS from a second attempt mailing, for which a 

new forwarding address has been provided by the USPS, will be immediately repackaged 

and sent to that new address.  The master database will be updated with the new address.  

(d) All mail returned by the USPS from a second attempt mailing, without a new 

forwarding address, will be coded as returned mail and the check will be voided. 

Additional efforts to identify the addresses of recipients will be conducted as is 

commercially reasonable in the view of the IDC, where the costs of further research and 

the amount to be distributed will be considered, subject to an initial rebuttable 

presumption that the additional costs of distribution will not exceed the amount to be 

distributed.  

Step Eighteen.  Under the IDC’s direction, Steps Fifteen through Seventeen will 

be validated.  

Step Nineteen.  The IDC shall declare the implementation of the Distribution 

Process complete 120 days after completing the last mailing required pursuant to the 

protocol described in Step Seventeen.  This 120-day period constitutes the 90-day period 

during which the check is valid plus a 30-day grace period. 

Step Twenty.  The value of all checks not cashed, returned distributions, 

distributions to account holders who cannot be identified, or interest accrued on these 



 

 
 22

accounts after the end of this 120-day period will be contributed to or remain in the 

Residue Account at Eastern Bank.  

Step Twenty-One.  Under the IDC’s direction, the balance in the Residue 

Account will be validated.  

Step Twenty-Two.  Under the IDC’s direction, BFDS will allocate the Residue 

Account among the eleven affected funds in the same ratio as would be calculated 

through the application of the distribution algorithm, without regard to the gross-up 

protocol.  

Step Twenty-Three.  Under the IDC’s direction, the Residue Account allocation 

calculations and distributions into the fund will be validated.  

Step Twenty-Four.  Under the IDC’s direction, BFDS will transfer funds from 

the Residue Account to the affected funds.  All funds, including accrued interest as of the 

date of the implementation of this step will then be fully distributed.  

Step Twenty-Five.  The IDC will declare that the distribution is concluded.  

BFDS will file within 30 days an accounting with the Commission as required by Rule 

1105(f).18  The Fair Fund shall terminate effective June 30, 2007 or 30 days after the final 

distribution to shareholders and the resolution of uncashed or unclaimed checks as 

described above, whichever is later.  Prior to the termination of the Fair Fund, the 

Respondent shall cooperate with the Tax Administrator to make adequate 

accommodation for tax liability and for the costs of tax compliance.  Upon termination as 

defined in this paragraph, all undistributed assets remaining in the Fair Fund shall be 

remitted to Treasury.   
                                                 
18  In addition, while the distribution is ongoing, BFDS will file an accounting during the first 

ten days of each calendar quarter, or as otherwise directed by the Commission.  BFDS will 
submit a final accounting for approval of the Commission, as required by Rule 1105(f).   



 

 
 23

For good cause shown, the Commission’s Staff may extend any of the procedural 

dates set forth in this Plan. 

The IDC will inform the Commission Staff of any material changes in the Plan, 

and will obtain approval from the Commission prior to their implementation.  If material 

changes are required, this Plan may be amended upon the motion of the Respondent, the 

Fund Administrator or upon the Commission’s own motion. 



 

 
 24

 

Submitted on February 20, 2007 
 
 
By: ________________/s/______________ 

Joseph A. Grundfest 
IDC for Banc One Investment Advisors 

Corporation