NEW YORK (Reuters) - U.S. regulators Wednesday fined Citigroup Inc., American Express Inc., J.P. Morgan Chase & Co. and Putnam Investments a combined $81.25 million for failing to provide customers with necessary information about mutual funds.

The Securities and Exchange Commission imposed fines of $40 million on Putnam, a unit of Marsh & McLennan Cos. (Research), and $20 million on Citigroup (Research) Global Markets Inc. for not disclosing payments to promote certain funds, resulting in conflicts of interest. Citigroup also improperly steered investors to higher-cost fund shares, the SEC said.

Meanwhile, the NASD said it fined American Express (Research) Financial Advisors $13 million, Citigroup Global Markets $6.25 million and Chase (Research) Investment Services $2 million for steering investors to costlier funds. They also agreed to plans to reimburse more than 50,000 households.

The firms neither admitted nor denied wrongdoing. Putnam had agreed in principle to settle with the SEC in November.

Putnam spokeswoman Sinead Martin said her firm in January 2004 had discontinued the practice faulted by the SEC.

Citigroup spokeswoman Kim Atwater and American Express spokesman David Kanahan said their companies were pleased to resolve their respective regulatory matters, and had taken steps to improve their fund practices. J.P. Morgan spokeswoman Kristen Batteria declined to comment.

The SEC faulted a program in which a Putnam affiliate arranged with more than 80 broker-dealers to promote the sale of its funds. It said more than 60 broker-dealers received commissions. The $40 million penalty will be distributed to Putnam funds.

Citigroup, meanwhile, received payments from 75 fund families in exchange for "shelf space" within the company's retail brokerage network, the SEC said. Citigroup sold only funds from those families, the agency said.

"We hope securities industry professionals have by now received the message that they must fully inform their customers of the nature and extent of any conflicts of interest that may affect their recommendations," SEC Enforcement Director Stephen Cutler said in a statement.

The Citigroup settlement and the NASD settlements addressed the firms' sale of Class "B" or Class "C" fund shares, without properly disclosing that Class "A" shares would have provided higher overall returns to investors.

Customers who make large fund purchases through brokers are typically entitled to "breakpoint" discounts on Class "A" sales charges, known as "loads." These generally begin at the $50,000 investment level.

"B" and "C" shares carry different kinds of loads, but more importantly also carry higher annual expenses.

"In recommending mutual funds that offer different share classes, brokers must consider the costs for each class and the effect those costs will have on a customer's investment, and recommend the share class that is most advantageous to the customer," said NASD Vice Chairman Mary Schapiro.

The NASD settlements will benefit about 30,000 American Express households, 18,000 Citigroup households and 2,000 Chase households.

The NASD, which regulates broker-dealers, was formerly known as the National Association of Securities Dealers.

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