The jury has failed to reach a verdict in the trial of three former executives of iSoft who were accused of alleged accounting irregularities at the software company in a case brought by the Financial Services Authority (FSA).

Timothy Whiston, the former chief executive of iSoft, and Stephen Graham and John Whelan were accused of trying to disguise the company's losses and lying to shareholders by allegedly prematurely booking revenues from a deal to supply software to a group of Irish hospitals.

The FSA claimed the three were involved in a 'massive conspiracy' to mislead investors. However yesterday the judge discharged the jury after they had failed to reach a verdict despite nearly 60 hours of deliberation.

There will now be a hearing on September 7, when the FSA will say whether it intends to opt for a retrial.

iSoft, a FTSE 250 company which was founded in 1999 as a buy-out from KPMG, had a market value of around £900m in 2006, when the company ran into problems over allegations of accounting irregularities. It subsequently booked pre-tax losses of £344m and was sold, first to Australian buyer IBA Health in 2007 and then to Computer Sciences Corporation last year.

At the trial, which began in April, the prosecution claimed the three directors had misled iSoft's board, auditors, lenders and shareholders for more than two years.

It was alleged that three years after iSoft had almost gone under, its auditors had discovered a 'forgery kit' in the executives' former offices. This had allegedly been used to make a fake contract for deal with the Irish hospitals. As a result, iSoft had been able to book an additional £20m in revenue in its first-half 2003 results and avoid reporting a loss, the court was told. This was denied by the executives.

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