Citigroup Incorporated will pay $26.3 million to settle claims by the Securities and Exchange Commission and the NASD it misled mutual fund investors. The NASD also fined American Express Financial Advisors and JPMorgan Chase & Company.

Citigroup, the world’s largest bank, agreed to pay $20 million to settle SEC claims that it failed to tell investors that mutual-fund companies paid for access to the bank’s brokerage customers. The NASD fined Citigroup $6.5 million, Amex $13 million, and JPMorgan $2 million for not telling investors which class of fund shares were best for them.

The fines are part of a probe by the two regulators into how companies sell, trade, and market mutual funds. The SEC and NASD have so far extracted settlements of more than $295 million from brokerages and mutual fund companies, mostly for failing to tell shareholders of payments made to brokerage companies.

“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,” said the director of the SEC’s enforcement division, Stephen Cutler.

The NASD, formerly known as the National Association of Securities Dealers, said the three companies should have better explained to investors the benefits from holding different types of shares.

“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,” NASD Vice Chairman Mary L. Schapiro said in the statement.

The three firms settled the allegations without admitting or denying wrongdoing, the SEC and NASD said in separate statements. They have agreed to pay money or convert the shares of customers in more than 50,000 households, the NASD said.

Citigroup began in July 2003 to disclose how it received payments from mutual fund companies and which fund classes were most helpful to each investor, said Kim Atwater, a spokeswoman for the company’s Smith Barney unit. Tom Kelly, a spokesman for JPMorgan, the second-biggest bank, declined to comment on the settlement.

David Kanihan, a spokesman for American Express, the world’s no. 4 issuer of credit cards, said the company has “worked diligently” in recent years to “enhance our mutual funds sales process.”

Also yesterday, Capital Analysts Incorporated, a Radnor, Pa.-based brokerage, agreed to pay $450,000 in fines and disgorged gains for operating a “tier program,” in which mutual fund firms get access to customers and salespeople.

Capital Analysts charged between $10,000 for “bronze” level firms and up to $45,000 for “platinum” companies, the SEC said in an administrative order. Capital Analysts didn’t fully reveal the program to investors, the SEC said.