UPDATE 1-Value Line, execs to pay $45 mln in SEC case

* Value Line, ex-execs agree to pay $45 mln in fines

* Value Line CEO resigns, replaced by chief legal officer

* Company accused of taking $24 mln in bogus commissions (Adds settlement details, CEO resignation)

LOS ANGELES, Nov 4 (Reuters) - Investment adviser Value Line Inc (VALU.O), two former top executives and an affiliated broker-dealer agreed on Wednesday to pay $45 million to settle a U.S. Securities and Exchange Commission fraud case against them.

Value Line said that Chief Executive Jean Buttner had resigned on Wednesday and was replaced by the company's Chief Legal Officer Howard Brecher, who becomes acting chairman and chief executive.

The SEC accused Value Line, Buttner, ex-Chief Compliance Officer David Henigson and Value Line Securities Inc of charging more than $24 million in bogus commissions on phantom trades and brokerage services in nine Value Line mutual funds from 1986 through November 2004.

Value Line, Buttner, Henigson, and VLS Inc did not admit wrongdoing, but consented to the entry of a cease-and-desist order that imposed $45 million in total fines.

The settlement also barred Buttner and Henigson from associating with any broker, dealer, investment adviser and investment company and from acting as an officer or director of any public company, the SEC and Value Line said.

A Value Line spokesman had no additional comment on the settlement. Neither Buttner nor Henigson could be immediatley reached for comment.

In September, Value Line said it had established a $48 million reserve to fund its settlement offer to the SEC, ending a four-year probe.

The company agreed to reimburse the affected mutual funds and replace Buttner with Brecher upon entry of the settlement order.

At the time, Value Line said it had restructured its investment management subsidiary and brokerage relationships and was "confident" that they comply with regulatory requirements.

The investigation found that Value Line failed to pass on discounted commission rates from outside brokers to the funds, and through a "commission recapture program" added additional fees for services that were not rendered, the SEC said.

The SEC said Buttner directed the "commission recapture program" and Henigson was charged with implementing it through unaffiliated broker-dealers. Both executives made false statements to the company's board of directors and shareholders and in securities filings, the SEC said. (Reporting by Gina Keating, editing by Leslie Gevirtz)