On October 13, the SEC announced a $19.5 million settlement with a Swiss bank for allegedly misleading U.S. investors by making false and misleading statements and omissions in connection the offering of complex retail structured notes. Among other things, the SEC’s Cease-and-Desist Order alleges that, between December 2009 and November 2010, the Swiss bank failed to disclose to investors (i) the taking unjustified markups; (ii) participation in hedging trades with non-systematic spreads; and (iii) trading prior to certain hedging transactions. The SEC further alleged the bank’s conduct “negatively impacted or, in the case of trading before hedging transactions, had the potential to negatively impact, pricing inputs used to calculate the” currency index. Without admitting or denying the charges, the bank agreed to pay disgorgement and prejudgment interest of $11.5 million and a civil money penalty of $8 million. $5.5 million of the disgorgement and prejudgment funds will be distributed to investors affected by the bank’s actions. According to the SEC, the action is the agency’s first case to involve misstatements and omissions by an issuer of retail structured notes.