UPDATE 1-Marvell to pay $10 mln to settle SEC charges

(Adds details from complaint, company comment)

WASHINGTON, May 8 (Reuters) - Marvell Technology Group Ltd (MRVL.O: Quote, Profile, Research) will pay $10 million to settle U.S. Securities and Exchange Commission charges that it reported false financial information by improperly backdating stock option grants, the SEC said on Thursday.

Diversified chip maker Marvell did not admit or deny the allegations, the SEC said in a statement.

The SEC also said Marvell's former chief operating officer, Weili Dai, will pay $500,000 to settle backdating charges. Dai did not admit or deny the allegations.

The SEC alleges that Marvell and Dai provided potentially lucrative options granted at below market prices to employees and did not report the compensation expenses.

Rather, Marvell backdated the options to dates with lower stock prices and falsely represented that the options had been granted on earlier dates, the SEC said.

From 2000 through 2006, Marvell overstated its income by $362 million, the SEC said.

"Marvell and Weili Dai are pleased that this chapter is closed and are focusing on moving forward and continuing to enhance Marvell's world-class business, its product offerings and its customer service," company spokeswoman Louise Kehoe said.

Dai, who is now Marvell's director of strategic marketing and business development, has agreed not to serve as an officer or director of a public company for five years. (Reporting by Rachelle Younglai; editing by Maureen Bavdek)