By Aruna Viswanatha, Jonathan Stempel, Sarah N. Lynch, Karen Freifeld and Jed Horowitz

WASHINGTON/NEW YORK, Nov 16 (Reuters) - JPMorgan Chase & Co and Credit Suisse Group AG will pay a combined $416.9 million to settle U.S. civil charges that they misled investors in the sale of risky mortgage bonds prior to the 2008 financial crisis, regulators said on Friday.

JPMorgan will pay $296.9 million, while Credit Suisse will pay $120 million in a separate case, with the money going to harmed investors, the U.S. Securities and Exchange Commission said.

Both settlements addressed alleged negligence or other wrongdoing in the packaging and sale of risky residential mortgage-backed securities (RMBS), including at the former Bear Stearns Cos which JPMorgan bought in 2008.

The banks settled without admitting wrongdoing, and in separate statements said they were pleased to settle.

"In many ways, mortgage products such as RMBS were ground zero in the financial crisis," SEC enforcement chief Robert Khuzami said in a statement. "Misrepresentations in connection with the creation and sale of mortgage securities contributed greatly to the tremendous losses suffered by investors once the U.S. housing market collapsed."

NO INDIVIDUALS CHARGED

Each settlement is significantly less than the $550 million that Goldman Sachs Group Inc agreed to pay in 2010, also without admitting wrongdoing, to settle SEC charges that it misled investors in a complex mortgage bond transaction.

They are also the latest SEC settlements not to punish individuals. In July, the SEC lost its first financial crisis-related trial against an individual when a Manhattan federal jury cleared former Citigroup Inc mid-tier executive Brian Stoker of wrongdoing in the sale of a mortgage bond transaction.

On a conference call with reporters, Khuzami said it is hard to bring cases against individuals over "structured" financial transactions because different people work on different aspects, making it hard to pin blame.

"We by no means are shying away from charging individuals where we find can identify them as being responsible," he said.

The enforcement actions are the second and third from a "working group" of federal and state agencies created this year by President Barack Obama to investigate misconduct related to RMBS that contributed to the financial crisis.

Last month, New York Attorney General Eric Schneiderman, who like Khuzami is a co-chair of the group, filed a still-pending civil fraud lawsuit against JPMorgan over Bear's packaging and sale of mortgage securities.

Khuzami told reporters on the conference call that the working group is probing other RMBS transactions.

JPMorgan shares closed up 14 cents, or 0.4 percent, at $39.53 on the New York Stock Exchange. Credit Suisse shares closed in Europe down 2.3 percent at 20.66 Swiss francs.

MISLEADING AND CONCEALING ALLEGED

The SEC accused JPMorgan of materially overstating in a prospectus the quality of home loans that backed a $1.8 billion RMBS offering it underwrote in December 2006.

According to the SEC, the largest U.S. bank represented that just four loans were delinquent by 30 to 59 days, when in fact there were more than 620, or about 7 percent of the total. Investors lost at least $37 million as a result, the SEC said.

The regulator also faulted Bear's failure to disclose its having arranged discounted cash settlements with originators that left investors stuck owning many problem loans, rather than forcing the originators to buy the loans back. It said Bear reaped at least $137.8 million from the practice.

Credit Suisse failed to disclose similar settlements, which netted $55.7 million, the SEC said.

The Swiss bank also misled investors by falsely claiming when it would buy back mortgage loans in two offerings in which borrowers had defaulted on their initial payments, and that "all first payment default risk" had been removed, the SEC added.

About $84 million of JPMorgan's payout and $39 million of Credit Suisse's represented fines. The JPMorgan accord requires approval by a federal judge in Washington, D.C., while Credit Suisse's case was resolved in an SEC administrative proceeding.

JPMorgan had in June 2011 agreed to pay $153.6 million to settle a separate SEC fraud case over its sale of mortgage securities to investors, also without admitting wrongdoing.

James Freedland, a spokesman for Schneiderman, said Friday's SEC accords help provide "accountability" for misconduct linked to the housing market's collapse.

In the Citigroup case, that bank had agreed last year to pay $285 million to settle with the SEC.

U.S. District Judge Jed Rakoff in Manhattan rejected that accord, saying he could not tell if it was fair because the bank did not have to admit or deny liability. The SEC and Citigroup have asked a federal appeals court to overturn his decision.

The cases are SEC v. JPMorgan Securities LLC et al, U.S. District Court, District of Columbia, No. 12-01862; and In re: Credit Suisse Securities (USA) LLC et al, U.S. Securities and Exchange Commission, No. 3-15098.

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