The outcome could not have been more damning.

In finding Bre-X geologist John Felderhof not guilty on all eight counts of securities violations yesterday, Mr. Justice Peter Hryn left the taxpayer-financed Ontario Securities Commission staring at the cadaverous remains of an ill-starred and, we now know, feebly mounted case.

And he left investors staring at nothing.

Nada.

This is what we get from the commission's decade-long attempt to hold someone � anyone � accountable for the Bre-X debacle, a mass hysteria that blew up $6 billion in share value, ruined lives, and left Canada's regulatory regime looking like the proverbial black spot in the global mining game.

The RCMP folded its investigative tent long ago. The U.S. class-action lawsuit died a tortured, and ultimately absurd death. The Canadian class-action suit is on life support.

The commission's pursuit of John Felderhof was investors' last remaining hope to see someone pay a price, however small.

In this, the commission failed.

Standing in the bright sunlight outside Old City Hall yesterday, defence lawyer Joe Groia was obviously pleased by the big win he had secured for his client.

Justice had been served, he said. "Felderhof was not aware of the salting."

Being aware of the salting was not, however, a charge that Mr. Felderhof faced.

When the commission at last laid its "information," as it's called in the parlance, in May 1999, Felderhof faced four counts of insider trading.

These were not centrally tied to the infamous sprinkling of alluvial gold into bags of rock samples in the far-off land of East Kalimantan, but rather to ownership of a key piece of the mine site itself, which Bre-X did not possess.

A further four counts related to news releases that touted phony resource estimates. On these counts the commission did not need to prove Felderhof's knowledge but, merely, his negligence.

And surely on these counts the defence must have been most nervous.

So what did the defence do?

It wisely introduced a roster of credible, even big-name witnesses, including Toronto's own Peter Munk, who, you may recall, desperately wanted to secure control of the "mine" on behalf of his company, Barrick Gold Corp.

In his summary yesterday, Justice Hryn recalled that Munk pulled in such allies as George Bush (the older one) and Brian Mulroney (yes, that one) to help him win favour with the Indonesian government. Bush went so far as to write to Indonesian President Suharto on Barrick's behalf.

Barrick's "A-team," wrote Hryn � and I take it he was referring to Barrick's top-notch geologists � would not have missed any fraud warnings, or so-called "red flags."

Hryn made a point of noting the more than a dozen witnesses for the defence who similarly testified that they too had no notion that there was anything amiss in the recovery, assay or reserve estimates.

For its part, the securities commission presented the lone testimony of Graham Farquharson, whose Strathcona Mineral Services was engaged by Bre-X in March 1997.

It was Farquharson who flew with a crew to the exploration site after Bre-X imploded, concluding that the tampering was "without precedent in the history of mining anywhere in the world."

Hryn was unimpressed. Farquharson, he said, in his reasons for his decision, had the benefit of hindsight.

"I prefer the evidence that there were no red flags that should have been apparent to Felderhof," he said in his ruling in favour of the defence.That stunning see-no-evil, hear-no-evil statement must have struck like an arrow to the commission's heart.

For, if John Felderhof didn't bear responsibility for the oversight of operations, then who?

David Walsh, the penny stock promoter who lived in Calgary? No.

Michael de Guzman? No.

The Filipino geologist who famously tumbled to his death (or not) from a helicopter was too busy salting the core.

In the end the commission failed to mount a credible argument that John Felderhof, an experienced geologist and the senior officer closest to the operation, the very same John Felderhof who was blue-skying a potential resource of 200 million ounces, was negligent.

In other words, John Felderhof was not held accountable for what he ought to have known.

And it was on Felderhof's word, as much as Walsh's, that investors relied.

Nor did the commission score even a partial victory on the insider trading charges. The commission's chief witness in this matter, said Hryn, fell short on numerous fronts, including a reliance on newspaper stories and analysts' reports, nothing, said Hryn, but hearsay evidence.

Taken as a whole, Hryn's ruling left the chilling impression that Bre-X was an unpreventable fraud, an all but perfect crime. If that's true, then what is to prevent it from happening again?

Yes, we have stricter disclosure regulations, brought in subsequent to the Bre-X blow-up.

But we also have the admittedly inflated resource estimates out of a little penny mining company called Southwestern Resources, and its faraway exploration site in China.

In what can investors take comfort? Through its narrative arc, the Bre-X criminal fraud resulted in no criminal charges, no jail terms, no profit disgorgement and now no securities conviction.

It was, now we know, the perfect crime.