WASHINGTON (Reuters) ? US market regulators are edging closer to a legal settlement in a more than two-year-old probe of telecommunications group Global Crossing Ltd., sources close to the case said on Wednesday.

The SEC staff has recommended a settlement, but the five-member commission has not voted on it, one source said.

It was unclear whether the staff has recommended charging both the company and former officers and directors -- a key sticking point in past negotiations, the sources said.

Former officers and directors last month reached a $325-million settlement of a shareholder class action suit, putting added pressure on the SEC to reach agreement, the sources said.

A spokeswoman for Global Crossing -- recently emerged from bankruptcy court reorganisation ? declined to comment.

Bermuda-based Global Crossing was a star of the late 1990s telecom boom years, spinning a worldwide web of high-speed fibre-optic cable. But its business buckled under heavy debt and a glut of telecommunications capacity.

It filed for Chapter 11 bankruptcy court protection in January 2002. Days later, officials said Global Crossing was under SEC and FBI investigation after a letter from a former executive accused the company of questionable accounting.

Former vice president of Finance Roy Olofson said Global boosted its profits by improperly booking revenue from sales of fibre-optic network capacity to other companies.

The SEC sought records from Global Crossing, as well as numerous other telecoms companies on network capacity deals.

The SEC also has looked into stock sales by current and former Global Crossing executives. Company founder Gary Winnick sold $700 million worth of shares over two years. In the recent class-action settlement, Winnick agreed to pay $55 million.

The SEC in August 2002 rejected an initial proposal to settle fraud charges from Global Crossing. The company had offered to agree to a cease-and-desist order without admitting or denying any wrongdoing, an informed source told Reuters.

But the SEC rebuffed the offer, saying it failed to name individuals in addition to the company, the source said.

Global Crossing said in December 2003 that it had emerged from bankruptcy proceedings under the control of state-owned Singapore Technologies Telemedia.

At that time, Global Crossing also said it had been in settlement talks with the SEC, but declined to predict when and how the negotiations would be resolved.

Media reports and one source close to the case said the FBI investigation of Global Crossing has been dropped.

The reorganised company's shares began trading on the Nasdaq market in January.