Ex-Bear Stearns hedge fund managers acquitted

NEW YORK (Reuters) - Two former Bear Stearns Cos hedge fund managers were acquitted on Tuesday of fraud charges in the first criminal trial of prominent Wall Street executives stemming from subprime mortgage securities that fueled a market meltdown.

A jury in U.S. District Court in Brooklyn, New York, reached its verdict in the month-long trial of hedge fund managers Ralph Cioffi, 53, and Matthew Tannin, 48, after less than six hours of deliberations.

The verdict could have implications for government investigations of possible wrongdoing at other companies in the lead up to the global financial crisis, including bailed-out giant insurer American International Group Inc and the bankruptcy of Lehman Brothers Holdings Inc.

Cioffi and Tannin were indicted in June 2008 on charges of securities fraud, wire fraud and conspiracy, one year after two funds they managed failed, costing investors $1.6 billion.

The government also charged Cioffi with insider trading, and the jury decided he was innocent of that charge.

Bear Stearns collapsed in March 2008, several months after the funds' failure, and was sold to JPMorgan Chase & Co in a government-brokered fire sale.

The case is USA v Cioffi & Tannin, U.S. District Court for the Eastern District of New York, No. 08-415.

(Reporting by Grant McCool; Editing Bernard Orr)