UBS AG has agreed to pay $19.5 million to settle SEC charges that it misled U.S. investors about the value of structured notes based on a proprietary currency index.

The agency claimed UBS failed to disclose that markups and spreads on hedging trades made by UBS traders in Switzerland in 2010 and 2011 reduced the index price by about five percent.

U.S. employees were not aware of the undisclosed markups and spreads, the order says.

The notes were tied to the V10 Currency Index with Volatility Cap.

Without admitting or denying the SEC’s findings, UBS agreed to pay disgorgement and prejudgment interest of $11.5 million, of which $5.5 million will go to investors. The firm will also pay a penalty of $8 million.

Between December 2009 and November 2010, about 1,900 U.S. investors bought about $190 million of the structured notes, the SEC said.

Last year, UBS sold $2.7 billion of structured notes overall.

The SEC claims the case is the agency’s first involving misstatements and omissions by an issuer of structured notes.

The agency’s order said enforcers took into account UBS’s “substantial cooperation,” which included an internal investigation, remedial measures and bringing witnesses located in Europe to the U.S. for interviews.

"UBS is pleased to have resolved this legacy matter with the SEC,” said UBS spokeswoman Karina Byrne in a statement.