A Canadian court has acquitted three top executives of former high-flying telecom company Nortel accused of defrauding the now-defunct firm, citing a lack of evidence.

Ontario Superior Court Justice Frank Marrocco said prosecutors did not prove "beyond a reasonable doubt" accusations against chief executive Frank Dunn, chief financial officer Douglas Beatty and controller Michael Gollogly.

The trio was accused of scheming, in 2002 and 2003, to pocket millions of dollars in bonuses by making it appear as if Nortel was doing better than it was, when it was actually failing.

The defence acknowledged accounting errors were made in the middle of a major restructuring at the company, but refuted suggestions of a conspiracy or fraud.