The Nova Scotia Securities Commission has dropped its allegations of stock market manipulation against two directors of the failed e-learning company, Knowledge House.
"It's great to see they've finally come to the point where they dropped all the charges. It is totally unacceptable that it's taken years to get here," said Calvin Wadden, the company's former director.
"They put me in financial ruin."
It's been six years since he and another director, Kenneth MacLeod, were formally accused. The distance education company collapsed 11 years ago amid allegations insiders manipulated the share price.
Wadden was one of a number of company officials and investors accused of wrongdoing by the commission.
Most settled, but Wadden and MacLeod did not. The charges were dropped Wednesday.
Commission chair Sarah Bradley said it was not in the public interest to pursue the case.
"The role that Mr. Wadden and Mr. MacLeod were alleged to have played in this was of a less serious nature."
Bradley said the commission's decision follows the revelation that the commission entered a secret settlement agreement with the brokerage house behind much of the Knowledge House trading, National Bank Financial, seven years ago.
A retired judge said keeping the deal secret was unfair to Wadden because it hindered his ability to defend himself.
Wadden wants an inquiry into the commission handling of the case.
Collapse blamed on market decline
Shares in Knowledge House Publishing began publicly trading on the Montreal Stock Exchange in 1998 and on the Toronto Stock Exchange in 1999 after the company changed its name to Knowledge House Inc.
In March 2001, the company signed a contract with the Nova Scotia government to develop a series of internet-based courses to prepare high school students for university.
On Aug. 16, 2001, the company received a $1.2 million payment from the province, but less than a month later Knowledge House was out of business.
During a legislative committee hearing in 2001, Knowledge House's blamed the collapse on the general decline in the market for software and on tight capital markets.
National Bank Financial followed up with a series of lawsuits seeking nearly $10 million in margin calls from insiders relating to trades of Knowledge House stock.