JPMorgan Chase & Co. settled with the Securities and Exchange Commission Wednesday over charges that the bank's brokerage division misled clients over the way its brokers were compensated between 2009 and 2011. The $4 million settlement comes as regulators devote increasing attention to the compensation arrangements between investment professionals and American savers. 

At the root of the settlement is language the bank publicized on how brokers earned salaries and bonuses. At the time, the bank's marketing materials and website claimed, "[We] compensate our advisors based on our clients' performance; no one is paid on commission."

The language led JPMorgan Private Bank clients to believe that "their brokers had skin in the game and were being compensated based on the success of customer portfolios," said SEC enforcement director Andrew Ceresney. In reality, the SEC found that the discretionary bonuses advisers received had no bearing on the portfolio performance of the bank's high-net-worth clients. 

It was true that brokers received no commissions for selling financial products, but neither were their bonuses dependent on how their clients' investments were doing. JPMorgan neither admitted nor denied the SEC's allegations in the settlement. 

Financial regulators weren't the first to point out the discrepancy. In May 2009, a vice president at JPMorgan's Private Bank emailed a marketing manager after reviewing the faulty language. “Why not be blunt and say 'paid on salary and bonus,' ” the vice president wrote, according to the SEC documents. “Technically, I do not see any compensation based on the client’s performance.”

Two months later, a compliance officer flagged the statements, noting that the assurance around portfolio performance “sounds strange and can be misinterpreted,” SEC documents said. 

Yet the language persisted in marketing materials and JPMorgan's public website for years. In 2011, a marketing manager reviewed the claims and determined, “I do not believe they are based in fact,” the SEC said. It wouldn't be until mid-2012 that the misleading statements were totally removed from public-facing documents. 

Brokerages have found themselves under harsher scrutiny in the past year as regulators have probed potential conflicts of interest in the investment advisory world. Last month, JPMorgan reached a much larger $307 million settlement with the SEC and other regulators over failures to disclose conflicts of interest with its hedge fund partners and other affiliates.