Former Bre-X exec not guilty of fraud

TORONTO, July 31 (UPI) -- An executive prosecuted in one of the biggest stock scandals in Canadian history and the biggest mining scandal of all time was found not guilty Tuesday.

John Felderhof, a vice chairman and chief geologist of defunct Bre-X Minerals Ltd. of Calgary, Alberta, did not violate securities regulations, Ontario Superior Court Justice Peter Hryn ruled, ending a six-year court battle.

Felderhof, 67, who was not present in court, was the only person charged in the scandal, in which investors lost more than $3 billion after 1997 tests revealed gold samples were faked.

He had faced penalties ranging from a $1 million fine to two years in prison, plus financial penalties of up to three times any profits from any insider trading, the CanWest News Service reported.

He was charged with four counts of illegal insider trading and four counts of issuing false press releases.

Bre-X became a stock-market darling in the mid-1990s after announcing it had found the world's largest gold deposit on the island of Borneo. But the company crashed when it was learned the area was spiked with outside gold.

Felderhof has maintained he knew nothing of the tampering.