Jeff Steckbeck didn’t read the prospectus. He didn’t realize the price was inflated. He didn’t even know the security he read about online was something other than an exchange-traded fund.

The 56-year-old civil engineer ultimately lost $45,000 on the wrong end of a volatility bet, or about 80 percent of his investment, after a Credit Suisse Group AG note known as TVIX crashed a week after he bought it in March 2012 and never recovered. Now Steckbeck says he wishes he’d been aware of the perils of bank securities known as exchange-traded notes that use derivatives to mimic assets from natural gas to stocks.

“In theory, everybody’s supposed to read everything right to the bottom line and you take all the risks associated with it if you don’t,” he said this month by phone from Lebanon, Pennsylvania. “But in reality, you gotta trust that these people are operating within what they generally say, you know?”

The ETN market has only gotten bigger since Steckbeck’s loss. Now U.S. regulators are ratcheting up pressure on banks to more clearly explain the risks after investors increased their holdings more than 50 percent to $24 billion since the end of 2012, according to data compiled by Bloomberg.

After getting banks last year to show customers that privately traded notes are worth less than they’re sold for, the U.S. Securities and Exchange Commission is negotiating with them to beef up disclosures on securities like the TVIX, according to people with knowledge of the matter.

Bolstering Disclosures

Steckbeck was among a group of investors who sought arbitration from regulators to recover losses after the ETN sank.

Nicole Sharp, a spokeswoman for Credit Suisse in New York, declined to comment on the bank’s ETNs, as did William Lloyd, a managing director at VelocityShares LLC, which licenses names and trademarks to the bank. Christina D’Amico, a spokeswoman for the SEC, declined to comment.

As individual investors increasingly wager their money on exotic derivatives, they still aren’t sufficiently savvy about how the notes work, even after the TVIX plummeted two years ago, according to Robert Whaley, a finance professor at Vanderbilt University in Nashville, Tennessee.

“They’re treating this market much the same way as they treat going to Las Vegas and playing blackjack,” Whaley, who designed the Chicago Board Options Exchange Volatility Index, or VIX, said in telephone interview. “I don’t agree that these people are particularly informed.”