US regulators have holstered a three-year investigation targeting firearms makers, finding insufficient evidence they colluded to boycott Smith and Wesson Corp after it undertook gun-control measures scorned by the industry.

The Federal Trade Commission will take no action against gun makers and distributors accused of engaging in an illegal, anti-competitive campaign to dissuade dealers from buying Smith and Wesson products, FTC spokeswoman Brenda Mack said Wednesday.

"We've closed the investigation," she said.

The industry's leading trade association welcomed the news, saying the probe had been baseless.

"The investigation was always politically motivated," said Lawrence Keane, vice president and general counsel at the National Shooting Sports Foundation, which also was a target of the investigation.

The Bush administration has since scrapped the agreement, in exchange for which several lawsuits against Smith and Wesson were dropped.

The FTC probe came to a quiet halt Aug 22, when the commission sent letters to the National Shooting Sports Foundation and others in the industry, confirming it had closed its file on the matter.

"This does not mean that a violation did or did not occur, so the commission reserves its right to take action again in the future if necessary," said Mack.

Smith and Wesson, a unit of Britain's Tomkins PLC, was unavailable for comment Wednesday.