GE fined after accounting probe

The SEC punishment reflects badly on General Electric

General Electric is to pay a $50m (£29.5m) civil penalty after charges from the US regulator that it had been guilty of improper accounting.

The Securities and Exchange Commission (SEC) said GE had changed the way it filed accounts to make its results more appealing to investors.

"GE bent the accounting rules beyond the breaking point," the SEC said.

The firm did not admit or deny the allegations, but said some statements had been changed.

Two of the violations outlined by the SEC were intentional, it said, but another two were errors by company officials.

"The errors at issue fell short of our standards," GE said in a statement, adding it had co-operated with the regulator.

Although the penalty is small, observers say it will not help the company develop good relations with investors.

Earlier this week, the Bank of America agreed to pay $33m to settle claims that investors had been misled during the purchase of Merrill Lynch - and the GE payment adds to the SEC's claims that it is taking a tougher stance with companies.

Last month GE reported earnings fell 47% to $2.9bn (£1.7bn) in the second quarter of 2009 from the same period last year, as the slowdown took its toll.

The company has been hit by falling revenues and profits at Capital Finance, its finance arm.

The conglomerate, seen as a barometer of US economic health, has interests ranging from the media to finance to heavy industry.