UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 96964 / February 22, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-16846

In the Matter of

UBS FINANCIAL SERVICES 

INCORPORATED OF PUERTO 

RICO,

Respondent.

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ORDER AUTHORIZING THE 

DISPOSITION OF FUNDS REMAINING IN 

THE FAIR FUND AND ANY FUNDS 

RETURNED TO THE FAIR FUND IN THE 

FUTURE, DISCHARGING THE FUND 

ADMINISTRATOR, CANCELING THE 

ADMINISTRATOR’S BOND, AND 

TERMINATING THE FAIR FUND

ADMINISTRATIVE PROCEEDING

File No. 3-16847

In the Matter of

RAMIRO L. COLON, III,

Respondent.

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On September 29, 2015, the Commission issued two separate, but related settled Orders 

Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act 

of 1934, Making Findings, and Imposing Remedial Sanctions (collectively, the “Orders”)1

against the UBS Financial Services Inc. of Puerto Rico (“UBSPR”) and UBSPR Guayanabo branch 

office manager, Ramiro L. Colon, III (“Colon”) (collectively, the “Respondents”). Each Order

found that UBSPR, through Colon, violated Section 15(b)(4)(E) of the Securities Exchange Act 

of 1934 (“Exchange Act”) by failing to supervise Jose Ramirez, Jr., a registered representative 

 

1

 See Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 

1934, Making Findings, and Imposing Remedial Sanctions, Exchange Act Rel. No. 76013 (Sept. 29, 2015), Admin. 

Proc. File No. 3-16846 and Order Instituting Administrative Proceedings, Pursuant to Section 15(b) of the Securities 

Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions, Exchange Act Rel. No. 76014 (Sept. 

29, 2015), Admin. Proc. File No. 3-16847.
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and associated person of UBSPR and UBSPR ’s Guayanabo branch, who engaged in conduct 

that violated the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities 

Act”) and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. 

In their respective Orders, the Commission required UBSPR to pay disgorgement of 

$1,188,149.41, prejudgment interest of $174,196.97, and a $13,637,653.62 civil penalty; Colon 

was ordered to pay a $25,000 civil penalty. The UBSPR Order also created a Fair Fund, 

pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid by UBSPR, 

along with the disgorgement and interest paid by UBSPR, could be distributed to harmed 

investors (the “Fair Fund”).

The Respondents paid a total of $15,025,000.00 pursuant to their respective Orders. 

On November 3, 2016, the Division, pursuant to delegated authority, issued an order 

appointing Rust Consulting, Inc. as the fund administrator of the Fair Fund and set the 

administrator’s bond amount.2

On April 27, 2017, the Secretary, pursuant to delegated authority, published a Notice of 

Proposed Plan of Distribution and Opportunity for Comment (“Notice”),3pursuant to Rule 1103 

of the Commission’s Rules on Fair Fund and Disgorgement Plans (the “Commission’s Rules”);4

and simultaneously posted the Proposed Plan. The Notice advised interested persons that they 

could obtain a copy of the Proposed Plan from the Commission’s public website or by 

submitting a written request to Keshia W. Ellis, Esq., United States Securities and Exchange 

Commission, 100 F Street, NE, Washington, DC 20549-5876. The Notice also advised that all 

persons desiring to comment on the Proposed Plan could submit their comments, in writing, 

within 30 days of the Notice. The Commission received no comments on the Proposed Plan 

during the comment period. On July 7, 2017, the Secretary, pursuant to delegated authority, 

issued an order approving the Proposed Plan and simultaneously posted the approved Plan of 

Distribution (the “Plan”). In addition, by this Order, the civil penalty paid by Colon was 

consolidated with the Fair Fund, for purposes of distribution administration.5

The Plan set forth a methodology for allocating the Net Fair Fund6comprised of the 

$15,025,000.00 paid by UBSPR and Colon, plus accrued interest, less taxes and administrative 

costs. The Plan sought to compensate investors who purchased Eligible Securities from January 

1, 2011 through September 13, 2013 and suffered an Eligible Loss Amount, as calculated by the 

methodology used in the plan of allocation in the Plan. Under the Plan, any funds remaining 

following completion of the distribution and the payment of taxes and administrative fees are to 

be transferred to the U.S. Treasury and the Fair Fund terminated, subject to the Commission’s 

approval of the Fund Administrator’s final accounting.

 

2

 Order Appointing Fund Plan Administrator and Setting Administrator’s Bond Amount, Exchange Act Rel. No. 

79227 (Nov. 3, 2016).

3

 Exchange Act Rel. No. 80535 (Apr. 27, 2017).

4

 17 C.F.R. § 201.1103.

5

 See Order Approving Plan of Distribution and Consolidating Settlement Funds for Administration, Exchange Act 

Rel. No. 81100 (July 7, 2017).

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 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.
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In accordance with the Plan, the Fund Administrator distributed a total of $15,350,082.07

from the Fair Fund to twenty-three (23) Eligible Claimants, 

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compensating each of the Claimants

for 88% of their losses. 

The Fair Fund earned $861,412.06 in interest; and paid $259,637.57 for state and federal 

taxes, $2,479.89 for investment and banking fees, $14,000.60 for Tax Administrator fees and 

expenses, and $258,784.88 for Fund Administrator fees and expenses. The Fair Fund currently 

holds $1,427.05, which is comprised of funds reserved to pay taxes and administrative expenses

and is expecting a delayed tax return in the amount of $4,126.00.

The Plan provides that the Fair Fund is eligible for termination and the Fund 

Administrator discharged after all of the following have occurred: (a) a final accounting has 

been submitted by the Fund Administrator for approval, and has been approved by the

Commission; (b) all taxes, fees, and expenses have been paid; and (c) all remaining funds have 

been transferred to the Commission for remittance to the United States Treasury. 

The Tax Administrator has submitted to the Commission a final invoice for its services in 

the amount of $5,472.00. The Commission staff has reviewed the invoice and cost 

documentation, and confirmed that the services have been provided and the expenses and fees 

are reasonable. The Commission staff has requested, pursuant to Paragraph 66 of the Plan and in 

accordance with the Commission’s Rules, that the Commission authorize the Office of Financial 

Management (“OFM”) to pay Tax Administrator fees and expenses of $5,472.00 from the 

balance in the Fair Fund of $1,427.05 and $4,044.95 from the anticipated tax refund.

Once the outstanding invoice is paid, it is anticipated $81.05 will remain in the Fair Fund. 

Therefore, the Commission staff has further requested in accordance with the Plan, that any 

funds returned to the Fair Fund in the future, exceeding the $4,044.95 to be paid to the Tax 

Administrator, be transmitted to the U.S. Treasury.

The Commission staff has confirmed that the Fund Administrator has completed the 

distribution process in accordance with the Commission’s orders and, except for the final Tax 

Administrator invoice, all taxes, fees, and expenses have been paid, and that all monies 

remaining in the Fair Fund have been received by the Commission. 

The final accounting, which was submitted to the Commission for approval, as required 

by Rule 1105(f) of the Commission’s Rules, 17 C.F.R. § 201.1105(f), and as set forth in the Plan, 

has been approved. 

 

7 Exchange Act Rel. No. 92512 (July 28, 2021).
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Accordingly, it is ORDERED that:

A. OFM pay the Tax Administrator’s fees and expenses of $5,472.00 from the Fair 

Fund and from funds returned to the Fair Fund in the future;

B. any future returned funds exceeding $4,044.95 to be paid to the Tax 

Administrator, shall be transferred to the general fund of the United States 

Treasury; 

C. the Fund Administrator, Rust Consulting, Inc.,is discharged; 

D. the Fund Administrator’s bond is canceled; and

E. the Fair Fund is terminated. 

By the Commission.

Vanessa A. Countryman

Secretary