Vitesse Semiconductor Corp. said Monday that the staff of the U.S. Securities and Exchange Commission agreed to recommend approval of a proposed $3 million settlement, ending a long-running investigation of the chipmaker? stock option practices under previous management.

If approved by the commission, the deal would close an SEC investigation launched in 2006 after the Wall Street Journal reported that the Camarillo company? top executives, including then-chief executive Louis Tomasetta, allowed executives to maximize their returns by choosing stock option grant dates that coincided with low share prices. A subsequent SEC probe into backdating practices unveiled widespread abuse by companies nationwide.

Tomasetta, former executive vice president Eugene Hovanec and former finance chief Yatin Mody were fired after Vitesse launched its own internal probe. Vitesse said the stock option grants were backdated for the executives?financial benefit and documents altered to cover it up.

The company eventually was delisted from the Nasdaq, its board and top management replaced, and several product units sold to raise cash.

In addition to the civil penalty, the proposed settlement would ?ermanently enjoin” the firm from violating antifraud and other provisions of securities law, Vitesse said.

Vitesse shares were up 2 cents, or 6 percent, to 30 cents in midday trading on the Pink Sheets.