An Ontario judge ruled yesterday that Livent Inc. co-founders Garth Drabinsky and Myron Gottlieb were guilty of fraud and forgery for manipulating the financial statements of Livent in the 1990s. The verdict, which came after an 11 year prosecution by the Crown attorneys, has sparked debate in Canada over the sufficiency and effectiveness of that country’s white collar fraud regulation.
The court ruled that accounting manipulations at Livent occurred “systematically” during the years Livent was a public company, and were “widespread and long-standing.” The Globe and Mail reports that Judge Mary Lou Benotto of the Ontario Superior Court found that “most importantly, I have been satisfied beyond a reasonable doubt that you knew what was happening with the financial statements.” The court apparently was not persuaded by the defendants defense, which the Crown previously characterized as “preposterous” and an “implausibly complicated conspiracy theory to explain how an accounting fraud occurred at the company for eight years without their knowledge.”
