WASHINGTON — J.P. Morgan Chase agreed to a $722 million settlement with federal regulators over accusations that the bank and two former executives made illegal payments to win municipal bond business from Jefferson County, Ala.

The Securities and Exchange Commission said yesterday that J.P. Morgan and former managing directors Charles LeCroy and Douglas MacFaddin paid $8 million to friends of Jefferson County commissioners who voted to hire the bank to carry out municipal bond offerings and other transactions to finance a new sewer system. The friends worked for local financial firms, but did not work on the deal.

The SEC said the bank passed on the costs of these payments to Jefferson County, but did not disclose the payments or conflicts of interest.

The bond deals ultimately resulted in millions of dollars in losses and pushed the county to the brink of bankruptcy, causing residents to pay much higher rates for water and sewer services.

The SEC charges are a blot on J.P. Morgan, which has had a cleaner record than other financial companies because it avoided many dangerous bets and swooped in to buy two banks, Bear Stearns and Washington Mutual, as they were collapsing.

Earlier this year, the SEC filed civil charges against Birmingham Mayor Larry Langford, a former president of the Jefferson County Commission, for accepting payments in connection with the matter. He was also found guilty of bribery, fraud and other charges in a criminal case and awaits sentencing.

J.P. Morgan settled the case without admitting or denying the allegations. "J.P. Morgan is pleased to have reached a settlement with the SEC in connection with its investigation of Jefferson County," the bank said in a statement. It said it has ended the business at the heart of the case and that LeCroy and MacFaddin no longer work for the firm.

The SEC also took regulatory action against LeCroy and MacFaddin and is seeking money from them as well.