WASHINGTON — JPMorgan Chase & Co. agreed to a settlement worth more than $700 million over federal regulators' charges that it made unlawful payments to friends of public officials to win municipal bond business in Jefferson County, Ala.

The scandal over the county's $3.9 billion debt has pushed it to the brink of filing what would be the biggest municipal bankruptcy in U.S. history.

The Securities and Exchange Commission today announced the settlement with JPMorgan, which canceled interest-rate swap contracts with the county worth $700 million in March.

The Wall Street bank did not admit or deny the SEC allegations in agreeing to pay a $25 million civil fine, a $50 million payment to the county and to forfeit $647 million in termination fees it claims the county owes from the canceled swap agreements.

The SEC also accused two former managing directors of JPMorgan, Charles LeCroy and Douglas MacFaddin, of securities law violations. The agency is seeking unspecified restitution from them. MacFaddin will contest the charges.

The SEC alleged JPMorgan, LeCroy and MacFaddin made about $8 million in undisclosed payments to close friends of several Jefferson County commissioners. Starting in July 2002, LeCroy and MacFaddin solicited the county for a $1.4 billion sewer bond deal.

Swayed by the payments, the county commissioners voted to select JPMorgan's securities division as managing underwriter of the bond offerings and its affiliated bank as swap provider for the transactions, the SEC said.