A Canadian court today acquitted three former executives from Nortel Networks on charges they had misstated Nortel's financial results from 2000 to 2004. Frank Dunn, Douglas Beatty, and Michael Gollogly -- Nortel's former chief executive, chief financial officer, and corporate controller -- were accused of misstating the company's earnings over the four year period and benefiting to the tune of 12.8 million Canadian dollars ($13 million) between them in bonuses. The men had faced up to 10 years in prison over the charges.
The decision, handed down by Ontario Superior Court Justice Frank Marrocco, ends a five-month trial that saw the defendants protesting their innocence the whole way. Nortel, the defense claimed, had adhered to generally accepted accounting principles.
The prosecution held that a restatement of Nortel's earnings in 2002 violated standard accounting rules. The prosecution further alleged that the three executives had misstated Nortel's Q1 2003 earnings in order to earn bonuses.
Marrocco said the prosecution had not met the burden of proof test in the case, further claiming, according to The Wall Street Journal
, that he believed a "culture of conservatism" existed within Nortel's accounting operations during the time frame for the indictment.
The attorney for Mr. Gollogly hailed the decision as a "clear vindication," while the executives themselves declined to comment. Provincial prosecutors are reportedly weighing whether or not to pursue an appeal.