Former Nortel Executives Ruled Not Guilty on All Charges

This article was last updated on April 16, 2022

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Three top ranking executives of Nortel, namely ex-CEO Frank Dunn, ex-CFO Douglas Beatty and ex-controller Michael Gollogly, were declared not guilty of all charges laid against them in an Ontario court judge ruling today. The ruling described that Crown prosecutors has failed to present solid proof required to convict the accused. Two counts of fraud charges were laid against the three former Nortel executives, accusing them of planning multimillion-dollar fraud scheme.

In case the accused executives were found guilty, they could have been imprisoned for up to 10 years. All the accused executives were fired by Nortel in 2004, whereas Monday’s ruling was announced almost a year after the trial begun. The Crown prosecutor argued that the accused were complicit in releasing accruals. Crown asserted that accused turned a blind eye towards money flowing from Nortel’s emergency fund, during difficult quarters, for making the company appear as if it was actually operating at a loss. And Since their bonuses depended on their capacity of generating profitability, the prosecution alleged the accused directly profited from the strategy, which was being kept a secret from the investors and board of directors.

In the ruling announced on Monday by the Ontario Superior Court Justice, Frank Marrocco, he alleged that there was insufficient proof showing the accused committed a crime. An analyst claimed that “It’s a fact that accounting rules for large corporations allow a certain amount of leeway, one corporation may take a certain approach, another corporation may take another approach — they may account for things differently. That’s not fraud and that’s clearly the argument that the judge accepted today.”