The Securities and Exchange Commission said Monday that from 1996 to 2002 Tyco used improper accounting techniques to overstate its financial results by at least $1 billion.
In agreeing to the penalty, Tyco did not admit or deny culpability.
"This enforcement action shows that, in addition to looting the company, Tyco's (Dennis) Kozlowski-era management lied about the company's financial results," Linda Chatman Thomsen, the SEC director of enforcement said in a prepared statement.
Kozlowski served as Tyco's chief executive from 1996 to 2002. Last year he was found guilty of looting the company and was subsequently sentenced to up to 25 years in prison.
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