The fate of three top Nortel Networks Corp. executives accused of defrauding the company and the public is to be decided in a Toronto courtroom today.
A judge is expected to rule today whether former CEO Frank Dunn, former CFO Douglas Beatty and former controller Michael Gollogly deliberately orchestrated a scheme in 2002 and 2003 that triggered $12.8 million worth of bonuses for themselves while Nortel stock continued to tank, eventually becoming worthless as the company collapsed into bankruptcy.
The global telecom giant was once Canada's most valuable company with 90,000 employees, and stock that was trading — at its peak — at more than $124.50 a share. The firm was worth nearly $300 billion at its height.
But even after the high-tech bubble popped and the company began spiraling downwards, losing billions of dollars, the three accused grew richer through an incentive plan designed to reward executives, should they find a way to stop the slide.
Dunn, Beatty and Gollogy are accused of cooking the books in 2002 and 2003, adjusting the company's reserves to make it appear as though Nortel was hitting its targets.
The defence has said that there were accounting errors made in the middle of a major restructuring at the company, but that no conspiracy or fraud was intended.
Ontario Superior Court Justice Frank Marrocco will decide today, more than a year after the fraud trial began, whether what went on inside Nortel during its decline could be chalked up to legitimate error. Each of the defendants faces two counts of fraud.
The accused, who were fired in 2004, have all pleaded not guilty to the charges. If convicted, each could face up to 10 years in prison.
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