Update: Nortel Execs Have Charges Dismissed
The former top brass at Nortel Networks felt ``vindicated'' Monday after being acquitted of fraud charges nearly a decade after they were accused of falsifiying financial records to trigger bonuses for themselves at the fallen technology giant.
Ontario Superior Court Justice Frank Marrocco said he was ``not satisfied'' that ex-CEO Frank Dunn, ex-CFO Douglas Beatty and ex-controller Michael Gollogly had ``deliberately misrepresented'' the finances at the now-defunct telecom company in 2002 and 2003.
``Therefore, I find each of them not guilty,'' he said.
Following the verdict, the three jumped to their feet to hug family members and their lawyers.
The 145-page ruling came a year after one of the largest and most complex corporate criminal trials in Canada began. Dunn, Beatty and Gollogly each faced two counts of fraud, one count of defrauding the public and one count of defrauding Nortel Networks Corp. It was alleged the men participated in a book-cooking scheme designed to trigger $12.8 million in bonuses and stocks for themselves while they were at the helm of Nortel. All three pleaded not guilty to the charges. They were fired fromthe beleaguered firm in 2004.
While Dunn did not address the media outside court, he released a statement saying he was ``grateful to have received vindication.''
``For a very long time, integrity has been the foundation of Nortel Networks' corporate governance and business practices. The documentary evidence and testimony re-affirmed this core value that I witnessed over my 28 years with the company,'' he said.
``I am looking forward to turning the page on this chapter of my life.''
Outside court, Beatty smiled and replied, ``Yes, I am,'' when asked if he was happy to be moving past the case.
His lawyer, Greg Lafontaine said the ruling vindicated his client.
``We're ecstatic with the result,'' he said. ``It's a greatjudgment. It's a complete vindication of Mr. Beatty.
``There was no fraud at Nortel. No fraud at Nortel at all.''
The Crown did not offer comment.
Sharon Lavine, who represented Gollogly, said the judge made a ``clear decision'' on the allegations, but added the turmoil of the trial has left a resounding impact on her client.
``It's an immeasurable emotional toll on someone as you can imagine,'' Lavine said outside court.
At its height, Nortel employed more than 90,000 workers worldwide and was worth nearly $300 billion. During the technology boom in 1999-2000, Nortel was one of Canada's most valuable companies, with its shares peaking at $124.50.
The verdict came on the same day that mediation talks on the distribution of nearly $9 billion in assets from the now-bankrupt Nortel were set to begin in Toronto.
The week-long proceedings, headed by Ontario Chief Justice Warren Winkler, are part of an effort to settle the company's creditor claims in Canada, the U.S. and around the world.