WASHINGTON – Former UBS banker Jose Ramirez, found liable for defrauding investors in closed-end Puerto Rico bond funds, should not face a permanent injunction because he is already out of the industry, his lawyer told a federal judge this week.

Ramirez’s lawyer, Guillermo Ramos-Luiña, filed his arguments in a Puerto Rico district court Monday. The motion came just over two weeks following the Securities and Exchange Commission’s request that the court issue an order permanently enjoining Ramirez from further violations of the federal securities laws.

The back and forth followed the court’s decision earlier this year to issue a summary judgment against Ramirez, finding that he misled customers about the safety of the closed-end funds and pocketed an extra $2.8 million by having customers use proceeds from lines of credit with UBS Bank to purchase shares in the funds.

The SEC said in its June 22 motion that a permanent injunction was warranted because Ramírez could still pose a risk to investors, even though he is not currently working in the securities industry after being barred by the Financial Industry Regulatory Authority. He is not yet 60, denied the SEC’s charges, refused to testify, and refused to consent to an injunction, the SEC argued.

But Ramos-Luiña told the court in a filing for Ramirez that there is no need to issue a permanent injunction, pointing out that the legal standard for seeking one is “a reasonable likelihood of future violations.”

“Ramirez respectfully posits that a permanent injunction is unwarranted in this case because he has already been permanently barred by FINRA from the securities industry,” the lawyer wrote. “Given that Ramirez can no longer work in the industry, there is no possibility, much less a likelihood, that he may infringe securities laws in the future.”

Ramos-Luiña also argued that the SEC’s assertion that Ramirez “has not yet recognized the wrongful nature of his conduct” is a flawed conclusion drawn only from his client’s decision to assert his Constitutional right against self-incrimination under the Fifth Amendment. Courts have held in the past that a defendant can’t be penalized for asserting that right, Ramos-Luiña said.

The SEC previously told the court that Ramirez’s actions were especially egregious and committed with a high-level of scienter, or knowledge of wrongdoing. While Ramirez was raking in close to $13 million in compensation from 2011-2013, the SEC said, many of his customers lost big when a series of credit downgrades hit Puerto Rico in 2013. The funds they’d been led to believe were safe investments lost 20%-30% of market capitalization, and cost them more than $37 million combined.

The injunction, if granted, would be only the first step in the SEC’s efforts to punish Ramírez. Previous SEC filings have indicated that it plans to ask the court to order Ramírez to pay a civil monetary penalty and to disgorge ill-gotten gains. The SEC also indicated plans to ask the court to permanently bar from the industry.

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