Ex Nortel CEO not guilty of fraud

A sign is pictured outside Nortel's Carling Campus in Ottawa August 10, 2009. Nortel Networks said on Monday its chief executive, Mike Zafirovski, will step down immediately and its board will shrink from nine directors to three as the bankrupt telecom equipment maker works to sell off all of its major assets. REUTERS/Blair Gable (CANADA BUSINESS SCI TECH)

A sign is pictured outside Nortel's Carling Campus in Ottawa August 10, 2009. Nortel Networks said on Monday its chief executive, Mike Zafirovski, will step down immediately and its board will shrink from nine directors to three as the bankrupt telecom equipment maker works to sell off all of its major assets. REUTERS/Blair Gable (CANADA BUSINESS SCI TECH)

Published Jan 14, 2013

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Toronto - The former chief executive of bankrupt Nortel Networks and two former senior executives have been found not guilty of falsifying financial reports in what prosecutors said was a scheme to report profits and gain bonuses.

Judge Frank Marrocco dismissed the charges Monday against former chief executive Frank Dunn, chief financial officer Douglas Beatty and corporate controller Michael Gollogly.

Each faced two counts of fraud after being accused of participating in a book-cooking scheme from 2002 to 2003 designed to trigger $12.8 million in bonuses and stocks for themselves. They were fired in 2004 and pleaded not guilty when the case went to trial last year.

The verdicts come four years to the day after Nortel sought bankruptcy protection and began liquidating.

Nortel was once the world's second-largest telecommunications gear maker. - Sapa-AP

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