A unit of UBS Group AG agreed to pay roughly $34 million in settlements with U.S. regulators on Tuesday regarding the sale of Puerto Rico bond funds that plummeted in value in recent years.

The settlements come as Puerto Rico's financial crisis is drawing increased scrutiny from U.S. lawmakers and regulators. A measure to establish more robust federal oversight over Puerto Rico's mutual-fund industry was introduced in Congress last week and a Senate committee held a hearing on Puerto Rico's financial problems on Tuesday.

UBS Financial Services Inc. of Puerto Rico agreed to pay $15 million to settle charges from the Securities and Exchange Commission, which said the unit failed to supervise a former broker who had customers invest borrowed money in the bond funds. The SEC said the money will be placed into a fund for investors who suffered losses.

The Financial Industry Regulatory Authority, which oversees securities firms, also said the UBS unit would pay a $7.5 million fine for failure to supervise, and $11 million in restitution to 165 customers who faced losses on their funds.

A UBS spokeswoman said in a statement: "We're pleased to have resolved these matters with the SEC and Finra with respect to separate inquiries initiated in early 2014. We remain dedicated to serving our customers during this difficult economic time for the commonwealth."

Separately, the SEC said it sued the former broker, Jose Ramirez Jr., in federal court. It alleges Mr. Ramirez increased his compensation by at least $2.8 million by having customers improperly borrow money to invest in the Puerto Rico bond funds. In addition, a former branch manager, Ramiro L. Colon III, agreed to pay a $25,000 penalty and be suspended from supervisory roles for a year. Mr. Colon is currently employed by UBS in Miami, according to his broker records.

An attorney for Mr. Ramirez couldn't immediately be reached for comment.

Hundreds of investors who owned the bond funds sold by UBS have filed legal claims with Finra seeking to recoup their losses. UBS has settled some of the cases, at times for millions of dollars, and Finra arbitrators that decide the cases issued rulings against UBS as well.

Puerto Rico has been facing a sluggish economy and high unemployment for years, and officials under Gov. Alejandro Garcia Padilla are seeking to restructure the island's $72 billion debt load. Mr. Garcia Padilla has called the island's debt unpayable, and many Puerto Rico bonds are trading well below face value.

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(END) Dow Jones Newswires

September 29, 2015 15:05 ET (19:05 GMT)

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