On May 1, 2012, the SEC instituted a settled administrative proceeding against UBS Financial Services Inc. of Puerto Rico. According to the SEC: "During 2008 and 2009, UBS PR, its former CEO ("CEO") and its Head of Capital Markets ("HCM") made misrepresentations and omissions of material facts to numerous retail customers in Puerto Rico regarding the secondary market liquidity and pricing of UBS PR-affiliated, non-exchange-traded closed-end funds ("CEFs" or "Funds")."

On May 1, 2012, the SEC announced that it "charged UBS Financial Services Inc. of Puerto Rico [UBS PR] and two executives with making misleading statements to investors, concealing a liquidity crisis, and masking its control of the secondary market for 23 proprietary closed-end mutual funds."

On May 22, 2012, the SEC ordered the appointment of Damask and Associates, LLP as the Tax Administrator for the Qualified Settlement Fund.

On June 6, 2012, the SEC granted the Division of Enforcement's request for an extension of time until January 31, 2013 to submit a proposed Plan of Distribution. According to the SEC: "The Division requires additional time to continue its consultations to develop a plan methodology and draft a proposed Plan of Distribution. Additionally, the Division will require the assistance of a fund administrator for a potential distribution to approximately 2,500 investors and will need time to take the necessary steps to have a fund administrator appointed by the Commission."

On July 5, 2012, the SEC ordered that: "The time for UBS PR to retain an independent third-party consultant, not unacceptable to the staff of the Commission, has been extended to August 10, 2012." On May 1, 2012, the SEC, among other things, had ordered UBS PR to "retain, within sixty days of the entry of the [May 1, 2012] Order, an independent third-party consultant, not unacceptable to the staff of the Commission, to review UBS PR's closed-end fund disclosures and trading and pricing policies, procedures, and practices for inadequacy."

According to the SEC, as part of the SEC's May 1, 2012 Order, UBS PR "undertook to retain an independent third-party consultant, not unacceptable to the Commission staff, to review UBS PR's closed-end fund disclosures and trading and pricing policies, procedures, and practices for adequacy." On July 27, 2012, the SEC ordered, among other things, that: "The time for UBS PR to submit to the Commission, the findings of the independent consultant making recommendations for any changes in or improvements to UBS PR's policies, procedures, and practices, and a procedure for implementing such recommended changes ... has been extended to 120 days after the date of UBS PR's retention of an independent consultant."

According to the SEC: "The Division of Enforcement ('Division') now seeks appointment of A.B. Data Ltd. ('A.B. Data') as the fund administrator and the approval of a fund administrator bond in the amount of $26,609,739.94 that is equal to the amount of the Fair Fund." On January 8, 2013, the SEC ordered the appointment of A.B. Data as Fund Administrator and that A.B. Data shall obtain a bond in the approved amount of $26,609,739.94.

On March 8, 2013, the SEC ordered that: "The time for UBS PR to submit the Commission the findings of the independent consultant making recommendations for any changes in or improvements to UBS PR's policies, procedures, and practices, and a procedure for implementing such recommended changes of the independent third-party consultant, is extended until June 5, 2013." According to the SEC: "Additional time is necessary for the independent consultant to complete its review and submit its report to UBS PR."

The Division of Enforcement submits this proposed Plan of Distribution to the SEC Commission in response to the Order instituted on May 1, 2012 against UBS Financial Services Inc. of Puerto Rico.

On January 6, 2017, the SEC submitted a notice of proposed plan of distribution and opportunity for comment in relation to the "Order Instituting Administrative and Cease-and-Desist Proceedings pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order ("Order")1 against [UBS Financial Services Inc. of Puerto Rico]". According to the SEC: "The Net Fair Fund will be comprised of the $26,609,739.94 in disgorgement, prejudgment interest, and a civil money penalty paid by Respondent, plus accumulated interest and earnings thereon, minus all taxes, fees, and other expenses of distributing the Fair Fund to investors who were harmed by the Respondent's misconduct described in the Order."

On February 21, 2017 the SEC issued an Order approving a plan of distribution in response to the May 1, 2012 "Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the SecuritiesAct of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order against UBS Financial Services Inc. of Puerto Rico (“ UBS PR” or “Respondent”)." On January 6, 2017 the SEC published the Notice of Proposed Plan of Distribution which was approved by this order.

The SEC stated that "The Distribution Plan provides for the distribution of funds collected by the Commission for the benefit of investors of UBS Financial Services, Inc. of Puerto Rico who invested in any of the twenty-three (23) non-exchange-traded, closed-end funds affiliated with Respondent and who were harmed by Respondent's omissions or misrepresentations concerning the pricing of their investments from May 15, 2008 through September 30, 2009, and/or by Respondent's failure to execute marketable sell orders placed by the investors from March 1, 2009 through September 30, 2009."

On June 30, 2017, the SEC announced a Name Change of Appointed Tax Administrator, and amended the Omnibus Order, beginning June 2017 and for calendar year 2018, to replace all references to Damasco with "Miller Kaplan Arase LLP which acquired Damasco & Associates LLP" in order to reflect Damasco's name change.

The SEC stated: "[I]t is hereby ORDERED . . . that [the Office of Financial Management ("OFM")] pay the Fund Administrator's current fees and expenses of $154,476.09 from the Fair Fund. Further, OFM is authorized to pay, at the direction of the Assistant Director of the Office of Distributions, any future fees and expenses of the Fund Administrator from the Fair Fund so long as the total amount paid to the Fund Administrator, including the invoice to be paid, does not exceed the total amount of the approved revised cost proposal submitted by the Fund Administrator."

The Commission stated: "[I]t is hereby ORDERED, that Commission staff shall transfer $27,063,708.73 from the Fair Fund to the Fair Fund's escrow account at The Huntington National Bank, and the Fund Administrator shall distribute such monies to the Eligible Claimants in accordance with the Plan."

The Commission stated: "The Commission staff has confirmed that the Fund Administrator has completed the distribution process in accordance with the Commission's orders, that 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, . . . has been approved."