The Securities and Exchange Commission is readying a civil enforcement case against the firm for an investment that lost as much as 95% of its value, according to the Wall Street Journal citing people familiar with the matter.

The case deals with a set of the bank’s structured notes, a custom-made debt security built with options and other derivatives. Merrill raised $150 million by selling the Strategic Return Note over several months in 2010. But as a result of market volatility, the five-year notes quickly lost their value while the cost associated with buying the options tied to the note rose.

But two Merrill Lynch brokers, Glen Ringwall and Mark Manion, who sold those notes to clients, said that those potential costs were never disclosed to them. They taped a call with their superiors confronting the issue in August 2011, when they were bracing for potential complaints from clients regarding the note. Their superiors in turn, told the two not to suggest that the products were flawed to clients and avoid customer complaints.

“We can’t just tell everyone, ‘Hey this is a defective product’,” Mark Ryan, a manager at the firm told Manion and Ringwall in the taped call, the Journal reported.

Nearly a year after the call, Ringwall and Manion took positions at UBS. They also sent a whistleblower compliant to the SEC, alleging that the structured notes sold by Merrill were faulty. Should the commission bring a case against Merrill with sanctions exceeding $1 million, the two brokers stand to gain a reward.