JPMorgan Chase will pay $4 million to settle a U.S. regulator's claims that the company misled private-bank customers about how its brokers were paid.
The bank falsely stated on its website and in marketing materials that employee compensation was based on clients' performance and that no commissions were paid, the U.S. Securities and Exchange Commission said in a statement Wednesday. The misstatements weren't corrected until May 2012 even though employees pointed out the inaccuracies more than a year earlier, the SEC said.
Customers were misled "into believing their brokers had skin in the game and were being compensated based on the success of customer portfolios" when in fact none of the factors used in determining pay was tied to portfolio performance, SEC enforcement chief Andrew Ceresney said in the agency's statement. Brokers were paid salary and discretionary bonuses "based on a number of other factors," the SEC said.
JPMorgan resolved the allegations without admitting or denying wrongdoing, the SEC said.
"There was no allegation that the mistake made years ago was intentional or that any client was harmed," said Darin Oduyoye, a spokesman for the New York-based bank. "We have further enhanced our procedures and processes to prevent a reoccurrence."
Last month, JPMorgan agreed to pay more than $300 million to resolve SEC and Commodity Futures Trading Commission claims that it didn't properly inform clients about its preference for steering them into in-house asset management products. The bank admitted wrongdoing in settling those allegations.