New York - Two former hedge fund managers at investment powerhouse Bear Stearns have been found not guilty of securities fraud in one of the first verdicts Tuesday on the devastating financial crisis that engulfed the world economy. Matthew Tannin and Ralph Cioffi presided over two hedge funds that collapsed in the summer of 2007, which was one of many factors that led to Bear Stearns' spectacular bankruptcy in March 2008 and the onset of the credit crisis.
Tannin and Cioffi were accused of lying to investors about the perilous state of their hedge funds. The jury in a New York district court acquitted them of all charges.
The Wall Street crisis, which pushed the world into its worst recession in six decades, has sparked massive public outrage against financial institutions that collapsed after taking unnecessary risks, particularly in the US housing market.
But the non-guilty verdict lays bare the difficulties for US prosecutors in apportioning any criminal blame. Tannin and Cioffi are the only two managers who have been charged so far with securities fraud in connection with Wall Street's turmoil of the past year.
"Of course, we are disappointed by the outcome in this case," Benton J Campbell, the lead prosecutor, said in a statement. His office would continue trying to enforce "honesty and integrity" in financial markets.
Bernard Madoff remains the highest-profile financier behind bars. He was sentenced to 150 years in prison in June for robbing investors through a 60-billion-dollar pyramid "Ponzi" scheme.
