UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No.

ADMINISTRATIVE PROCEEDING

File No. 3-14893

In the Matter of

QUANTEK ASSET MANAGEMENT, LLC,

BULLTICK CAPITAL MARKETS

HOLDINGS, LP, JAVIER GUERRA and

RALPH PATINO,

PROPOSED PLAN OF

DISTRIBUTION

Respondents.

I.

Overview

1.

The Division of Enforcement (“Division”) proposes the following plan of distribution

(“Distribution Plan”) pursuant to Rule 1101 of the Commission’s Rules on Fair Fund and

Disgorgement Plans (“Rules”), 17 C.F.R. § 201.1101, and Rule 1102(b) of the Rules, 17 C.F.R.

§ 201.1102(b). If approved, the Distribution Plan would provide for the transfer of the funds

directly to the general fund of the United States Treasury and terminate the Fair Fund. As

explained below, the Division has concluded that distributing the Fair Fund to investors would

not be feasible.

2.

On May 29, 2012, the Commission issued an Order Instituting Administrative and Ceaseand-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 203(e),

203(f), and 203(k) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment

Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and Cease-andDesist Orders (“Order”) 1 against Quantek Asset Management, LLC (“Quantek”), Bulltick

Capital Markets Holdings, LP (“Bulltick”), Javier Guerra (“Guerra”), and Ralph Patino

(“Patino”) (collectively, the “Respondents”). The Commission found that, from 2006 through

2008, Quantek, a Latin American-focused hedge fund adviser, misled investors about three

important attributes of funds that it managed: (1) whether management had “skin in the game;”

(2) the funds’ investment process, and (3) certain related-party transactions.

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Securities Act Rel. No. 9326.

3.

As a result of the conduct described in the Order, the Commission ordered Quantek and

Guerra to jointly and severally disgorge $2,056,446, and pay prejudgment interest in the amount

of $219,585. The Commission also ordered that Quantek pay a civil money penalty of $375,000;

Bulltick pay a civil penalty of $300,000; Guerra pay a civil penalty of $150,000; and that Patino

pay a $50,000 civil penalty. The Commission also ordered that a Fair Fund (the “Quantek Fair

Fund”) be created pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 for the

disgorgement, interest, and penalties paid by the Respondents. The Respondents made the

payments as required by the Order, with the exception of Patino, who has an outstanding balance

of $58.33. A total of $3,151,031 is currently being held at the United States Department of the

Treasury’s Bureau of the Fiscal Service for investment.

II.

The Distribution Plan

4.

Rule 1102(b) of the Rules provides, “[w]hen, in the opinion of the Commission or the

hearing officer, the cost of administering a plan of disgorgement relative to the value of the

available disgorgement funds and the number of potential claimants would not justify the

distribution of the disgorgement funds to injured investors, the plan may provide that the

disgorgement funds and any civil penalty shall be paid directly to the general fund of the United

States Treasury.”2

5.

The Division, in consultation with the Division of Economic and Risk Analysis

(“DERA”), has determined that a distribution of the Fair Fund is not feasible. The Division does

not have records sufficient to calculate each investor’s losses and their pro rata share of the fund.

Quantek has been de-registered and out of business since the Commission’s action in 2012 and

there is no way for the Commission staff to obtain these records. Without such records, the

Division cannot develop a fair and reasonable method for distributing the funds. See generally,

Official Committee of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73, 81-83 (2d

Cir. 2006) (“once the district court satisfies itself that the distribution of proceeds in a proposed

SEC disgorgement plan is fair and reasonable, its review is at an end”) (citing SEC v. Wang, 944

F.2d 80,85 (2d Cir. 1991). Any alternate distribution methodology not based on the pro rata

return of management fees would be speculative. Furthermore, the Division does not have

sufficient contact information in order to locate and notify the harmed investors and, for the

reasons listed above, cannot obtain this information from Quantek. The staff has only a partial

list of the harmed investors and their addresses, but many of the harmed investors were

institutional investors, all but 30 of which were located in foreign countries, that have been

liquidated and the address information is stale. The fact that the harmed investors are located in

foreign countries, makes the effort to update investor address and confirm operating status more

challenging. The Division and DERA have expended a significant amount of staff resources

considering the alternatives, but have concluded that the Fair Fund should be paid to the general

fund of the United States Treasury.

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See also FTC v. Bronson Partners, LLC, 654 F.3d 359, 373 (2d Cir. 2011) (“[w]hile agencies may, as a matter of

grace, attempt to return as much of the disgorgement proceeds as possible, the remedy is not, strictly speaking,

restitutionary at all, in that the award runs in favor of the Treasury, not of the victims.”).

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6.

Within thirty (30) calendar days of Commission approval of the Distribution Plan, the

funds will be paid to the general fund of the United States Treasury, subject to Exchange Act

Section 21F(g)(3).

III.

Notice and Comment Period

7.

The Notice of the Proposed Plan of Distribution and Opportunity to Comment (“Notice”)

will be published on the Commission’s website at http://www.sec.gov/litigation/fairfundlist.htm.

Any person wishing to comment on the Distribution Plan must do so in writing by submitting

their comments to the Commission within thirty (30) days of the date of the Notice: (a) to the

Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, NE,

Washington, DC 20549-1090; (b) by using the Commission’s Internet comment form

(http://www.sec.gov/litigation/admin.shtml); or (c) by sending an email to rulecomments@sec.gov. Comments submitted by email or via the Commission’s website should

include “Administrative Proceeding File Number 3-14893” in the subject line. Comments

received will be publicly available. Persons should only submit comments that they wish to

make publicly available.

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