NEW YORK (CNN/Money) - The Securities and Exchange Commission broadened its charges against WorldCom Tuesday after the bankrupt telecommunications company acknowledged it may have to restate more than $9 billion in profits.

The new charges, filed in Manhattan Federal District Court, state that WorldCom engaged in fraud in connection with securities offerings and violated internal controls as well as rules on books and records.

On Tuesday, WorldCom, the No 2 long-distance provider, said it likely overstated income by more than $9 billion, nearly $2 billion above the amount WorldCom previously restated.

The new SEC complaint says WorldCom misled investors as early as 1999, well before 2001, as previously charged.

"As a result of undisclosed and improper accounting, WorldCom materially overstated the income it reported on its financial statements by approximately $9 billion," the complaint says. WorldCom already said it misstated results by $7.2 billion.

Sources familiar with the case say there will not be a settlement of the charges announced this week, though they say the two sides did hold a conference call with Judge Jed Rackoff Monday evening.

WorldCom, which said it has $1 billion in cash on hand, said it is in settlement talks with the SEC.

"Additionally, the company said that restatements of past accounting have no impact on its ability to continue to provide service to its customers nor on its ability to emerge from bankruptcy protection, which it expects to take place in mid-2003," a statement from the company said.

The SEC also is denying reports that it will ask for a dismissal of charges.

"Despite today's press reports to the contrary, the commission has no intention of seeking the dismissal of its fraud charge or any of its other claims against WorldCom," said Peter Bresenan, SEC deputy chief litigation counsel.

On June 27 the SEC charged WorldCom with "massive accounting fraud." The civil complaint charges WorldCom with violating anti-fraud and reporting provisions of the federal securities law.

While the parties may be moving toward resolution of the civil charges against WorldCom, the Justice Department is continuing its criminal investigation.

"We have not indicated in any manner that we are winding down," said Justice spokesman Bryan Sierra.

Both the Wall Street Journal and New York Times Tuesday reported that the SEC was in talks with WorldCom about settling fraud charges filed against the bankrupt telecommunications company.

A settlement would clear a hurdle for WorldCom, which hopes to emerge next year from a record-setting $104 billion bankruptcy.

A handful of executives at Clinton, Miss.-based WorldCom have pleaded guilty to charges related to the accounting scandal. But ex-Chief Financial Officer Scott Sullivan has maintained his innocence and is expected to go to trial on charges of securities fraud, conspiracy to commit fraud, and filing false statements with the SEC.

The company faces other problems, including lawsuits by investors trying to recover losses.

Separately, U.S. Attorney General Richard Thornburgh, the court-appointed independent examiner of WorldCom, said Monday that the company had a "harmful" corporate culture and "enough blame to go around" for the firm's collapse, ranging from executives and the board of directors to auditors and financial analysts.

Thornburgh filed his 118-page report Monday with the U.S. Bankruptcy Court detailing "extraordinary and illegal steps" used to manipulate WorldCom financial records.

WorldCom first disclosed an accounting problem June 25, when it said it would have to restate about $3.8 billion in expenses from the previous five quarters. It later said it hid some $7.2 billion in expenses.