(Bloomberg) -- UBS will pay $19.5 million in a settlement with the SEC over claims the bank misled individual investors about the risks tied to debt securities packaged with derivatives, officials said.

The Swiss bank misrepresented a proprietary currency index tied to the so-called structured notes, according to the agency this week. UBS misled investors that the investment was "transparent" and that it used "market prices" to calculate the financial instruments underlying the index while undisclosed hedging trades by UBS actually reduced the index by about 5%, according to the SEC. That led to investor losses of about $5.5 million.

The case is the first against an issuer of so-called structured notes, which are debt securities typically sold to unsophisticated investors. Wall Street banks issue as much as $50 billion of the securities annually.

"This first-of-its-kind case involving misstatements and omissions by a structured notes issuer shows that the SEC continues its commitment to pursue wrongdoing across the securities industry in order to better protect investors," SEC Chair Mary Jo White said.

UBS, which didn't admit or deny the regulator's findings, agreed to pay an $8 million penalty and $11.5 million in disgorgement and interest.

"UBS is firmly focused on the future with an unwavering commitment to upholding a culture of doing the right thing and reducing operational risks," Karina Byrne, a spokeswoman for the Zurich-based bank, said in a statement.

-- With assistance from Ben Eisen in New York.

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