The Securities and Exchange Commission filed charges against the former CEO, CFO and treasurer of natural gas distributor Nicor, charging the Chicago-area company with financial fraud spanning the period of 1999 to 2002.

The SEC alleged in its complaint that the executives -- former CEO Thomas Fisher, former CFO Kathleen Halloran and former treasurer George Behrens -- devised a scheme to have Nicor profit by accessing its lower-cost last-in, first-out layers of gas inventory.

They also allegedly engaged in or approved of improper transactions, and made misrepresentations in their financial statements and SEC filings. The SEC said the rigged reductions in gas inventory levels allowed Nicor to manipulate earnings and increase its revenues.

The commission accused Nicor of understating its expenses in the first and second quarters of 2001 by bundling a weather insurance contract with an agreement to supply gas to the company's insurance provider at below-market prices. The SEC said the losses on the supply agreement with the insurance company were charged to Nicor's utility customers.

In addition, the SEC said the former executives failed to make disclosures required by GAAP about the effects of LIFO inventory liquidations on Nicor's reported income. Nicor has already agreed to a court order enjoining it from violating securities laws and ordering it to pay a $10 million penalty. The commission is now seeking disgorgement, civil penalties and injunctive relief from the three former executives.

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