Today, a federal jury found two Bear Stearns hedge fund managers not guilty of fraud related to subprime mortgages. Portfolio manager Ralph Cioffi and the funds' COO Matthew Tannin were accused of misleading investors—and losing $1.6 billion—were acquitted after a jury took less than a day to deliberate on charges.

The NY Times reports, "The case was the first against high-profile Wall Street executives charged with fraud stemming from the financial crisis. And in many ways, it was a test of whether the government can successfully prosecute financial fraud in an era when complex investments like collateralized loan obligations and subprime mortgages can confuse jurors with little background in finance." So, we guess the government failed that test!

The two men allegedly told clients that the funds were doing great: According to Bloomberg News, prosecutors said "The men claimed in e-mails and conversations to be adding their own money to the funds in the months immediately prior to their collapse, according to the government. Neither man added any money to the funds, once valued at $20 billion, the U.S. alleged." The defense said the men were optimistic.