The alleged use of improper accounting methods and thus misleading investors has seen General Electric hit by a hefty $50m (£29.5m) fine by the US regulator. The Securities and Exchange Commission alleges that GE misled its investors by 'reporting materially false and misleading results in its financial statements', and used improper accounting methods to increase its reported earnings or revenues and avoid reporting its negative financial results. In a bid to settle the charges, GE has agreed to pay the $50m penalty. The company has neither admitted nor denied the charges. The four alleged accounting violations include: - January 2003: an improper application of the accounting standards to GE's commercial paper funding programme to avoid unfavourable disclosures and an estimated $200m pre-tax charge to earnings - 2003: a failure to correct a misapplication of financial accounting standards to certain GE interest-rate swaps - 2002-2003: reported end-of-year sales of locomotives that had not yet occurred in order to accelerate more than $370m in revenue - 2002: an improper change to GE's accounting for sales of commercial aircraft engines' spare parts that increased its 2002 net earnings by $585m - 2002: improper change to GE's accounting for sales of commercial aircraft engines' spare parts that increased GE's 2002 net earnings by $585m 'GE bent the accounting rules beyond the breaking point. Overly aggressive accounting can distort a company's true financial condition and mislead investors,' said Robert Khuzami, director of the SEC's division of enforcement. The alleged accounting irregularities were discovered during a risk-based investigation by the SEC of GE's accounting practices. During these investigations, the regulator identifies a potential risk in an industry or at a particular issuer and then develops an investigation plan that aims to test whether that problem actually exists. In the GE case, the SEC targeted the potential misuse of hedge accounting as a possible area of risk. The regulator said its investigation uncovered four alleged accounting violations, the last of which was corrected by GE in 2008. In a statement the regulator said: 'The SEC took into account the remedial acts taken by GE and its audit committee during the investigation, including improvements to its internal audit and controllership operations. The charges announced today conclude the SEC's investigation with respect to the company.'