Three former executives of bankrupt Nortel Networks were acquitted this week of falsifying financial reports in an accounting scandal that precipitated the company's eventual bankruptcy and demise.

The Ontario Superior Court dismissed all charges against former chief executive Frank Dunn, chief financial officer Douglas Beatty and corporate controller Michael Gollogly of falsifying financial results in the early 2000s to inflate profits and gain bonuses. The scandal rocked the telecommunications giant, which at one time was one of Canada's largest employers.

Nortel never recovered, having filed for bankruptcy four years ago and then selling off its assets and liquidating operations. Nortel shareholders and retirees lost their investments in the company.

Each former executive faced two counts of fraud after being accused of participating in an accounting scheme to trigger $12.8 million in bonuses and stocks for themselves, according to US News & World Report. They were fired in 2004 and pleaded not guilty when the case went to trial last year.

Ontario Superior Court Justice Frank Marrocco said he was "not satisfied" the financials were misrepresented, according to US News.

In a statement, Dunn said Nortel was always playing by the rules.

"I am pleased with today's decision and after waiting almost nine years, I am grateful to have received vindication," he said. "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. I am looking forward to turning the page on this chapter of my life."

Nortel was once the world's second-largest telecommunications gear maker. During the 1990s telecom and Internet boom, Nortel had more than 95,000 employees. In 2000, it had a market capitalisation of almost $400 billion.