General Electric Co will pay a $50 million civil penalty to settle charges that it had misled investors with some fraudulent accounting in 2002 and 2003, the largest U.S. conglomerate said on Tuesday.

The SEC found that GE's policies for accounting for hedging commercial paper and transactions at its rail unit were intentional violations of anti-fraud provisions of securities law.

Fairfield, Connecticut-based GE said it agreed to the settlement without admitting or denying wrongdoing.

Two other accounting irregularities, regarding how GE accounted for swap derivatives and for how it recorded profit on sales of spare parts for jet engines were negligent, but not intentional violations, the SEC found.

GE bent the accounting rules beyond the breaking point, said Robert Khuzami, director of the SEC's Division of Enforcement. Overly aggressive accounting can distort a company's true financial condition and mislead investors.

The company has already restated some financial statements from 2005 through 2008 and said no further restatements would be needed.

We have concluded that it is in the best interests of GE and its shareholders to resolve this matter and put it behind us, GE said in a statement. The errors at issue fell short of our standards, and we have implemented numerous remedial actions and internal control enhancements to prevent such errors from recurring.

GE shares were off about 10 cents at $13.62 on the New York Stock Exchange.

(Reporting by Scott Malone, editing by Gerald E. McCormick and Maureen Bavdek)

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