WASHINGTON (Reuters) - Gateway Inc. settled financial fraud charges in the Securities and Exchange Commission's probe of its accounting practices, Gateway said Thursday.

Gateway (GTW: Research, Estimates), which in April said it would have to delay filing its 2002 annual report and lower its revenues for 1999 through 2001, did not admit or deny wrongdoing, and paid no fine. However, the company did agree to cease and desist from future violations of U.S. securities laws

The SEC also filed a civil lawsuit against the personal computer maker's former chief executive, chief financial officer and controller in a federal court in San Diego, a source close to the situation said.

Gateway shares were up 4 cents at $4.80 in afternoon trading on the New York Stock Exchange.

The SEC has been examining Gateway's accounting for marketing deals it offered with AOL Internet services, a unit of Time Warner Inc., the parent company of CNN and CNN/Money.

Both Gateway and AOL have been subject to a related investigation by the Justice Department.

The SEC began probing Gateway's accounting practices in December 2000, but the company did not disclose the investigation until November 2002.