The agreement, announced by the Ontario Securities Commission (OSC), came three years after the watchdog first launched a probe into a series of financial restatements by Canada's biggest communications equipment maker.

The settlement only covers the costs of the OSC investigation. No financial penalty is warranted, the OSC said, because it would punish the company for the past conduct of its former executives, who are facing criminal charges.

But Nortel must still address ongoing financial reporting issues as part of the settlement, the OSC said.

Nortel was accused of issuing misleading or untrue financial statements between 2000 and 2003, when executives purportedly ignored inappropriate accounting to meet earnings targets.

The accounting troubles surfaced in the second half of 2003, when Nortel issued its first restatement.

When the company discovered it had to restate its financial statements again in early 2004, it fired chief executive Frank Dunn, chief financial officer Douglas Beatty and controller Michael Gollogly.

Since then, Nortel has issued two more restatements, and slashed jobs while its stock plunged. Shareholders sued the company and authorities in both Canada and the United States launched criminal and regulatory investigations.

In March, US authorities filed civil charges against Dunn, Beatty, Gollogly and former assistant controller Maryanne Pahapill, also known as Mary Anne Poland.

In Canada, Ontario officials filed allegations against Dunn, Beatty and Gollogly.

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