(Reuters) - JP Morgan Chase & Co’s brokerage unit will pay $4 million to settle allegations it misled customers about how it paid brokers, the U.S. Securities and Exchange Commission said on Wednesday.
The case stems from comments on the website for U.S. Private Bank, the company’s private bank, which falsely stated that advisers are paid “based on our clients’ performance” and that “no one is paid on commission,” the SEC said in a statement.
Advisers, however were paid salaries and discretionary bonuses based on various factors, not client performance, the SEC said.
The statements, which were made between 2009 and 2012, also appeared in marketing materials distributed to current and prospective customers as well as PowerPoint slides that advisers were to use when making presentations to customers, the SEC said.
”There was no allegation that the mistake made years ago was intentional or that any client was harmed,” a JP Morgan spokesman said. JPMorgan, which neither admitted nor denied the SEC’s findings, has improved its procedures to prevent a recurrence, the spokesman said.
Employees pointed out the false statements on four occasions between 2009 and 2011, but JPMorgan failed to correct the problem, the SEC said.
In one instance, a private bank employee wrote in a 2009 email to a marketing manager, ”Why not be blunt and say ‘paid on salary and bonus,’ technically, I do not see any compensation based on the client’s performance.
Other employees sent similar emails to the marketing manager, the SEC said. JPMorgan first corrected the statement in some of its marketing materials in 2012, the SEC said.
Reporting by Suzanne Barlyn; Editing by Andrew Hay