NEW YORK (Bloomberg) ? The Securities and Exchange Commission?s staff recommended filing an accounting fraud suit against Tyco International Inc., assistant district attorney Owen Heimer of Manhattan said.

The potential suit was disclosed at yesterday?s sentencing hearing for ex-Tyco chief executive L. Dennis Kozlowski, who along with finance chief Mark Swartz was convicted in June of 22 felonies, including a dozen counts each of grand larceny. Kozlowski and Swartz were both sentenced today to 8.3 to 25 years in jail for fraud, and were taken from court in handcuffs.

The prosecutor?s comments signal that Tyco may be close to resolving an SEC investigation of acquisition accounting that has dogged the company for at least three years. Tyco made more than $64 billion in acquisitions during Kozlowski?s tenure as chief executive, which ended with his ouster in 2002. Tyco in May said it set aside $50 million to cover a potential settlement of the accounting probe.

The SEC often files a civil suit spelling out its factual allegations and legal claims against a company at the same time that the agency announces a settlement. The SEC also usually postpones its cases during related criminal prosecutions.

?I would expect the folks at the SEC have been talking to the district attorney?s office for some time,? said David Becker, a partner at Cleary Gottieb Steen & Hamilton LLP in Washington and a former SEC general counsel. ?You don?t generally proceed with a suit while a criminal case is pending.?

SEC spokesman John Nester declined to comment on the prosecutor?s statement.

?The SEC staff?s proposed allegations relate to Tyco?s historical accounting for the periods 1996 to 2002,? David Polk, a company spokesman, said yesterday in a prepared statement. ?The settlement under discussion with the SEC staff would not require Tyco to restate any of its financial statements.?