Bear Stearns hedge fund managers found not guilty

Two Bear Stearns hedge fund managers have been found not guilty of fraud.

The managers became the centre of a scandal in June 2007, when their funds collapsed after making huge bets on the US sub-prime mortgage market.

Ralph Cioffi and Matthew Tannin were yesterday cleared of charges, including conspiracy and securities fraud, relating to the downfall of their funds.

The hedge funds were among the first to be hit by the sub-prime mortgage crisis, which eventually evolved into a full financial crisis in 2008. Investors lost funds worth around $1.6bn.

Cioffi and Tannin are among the first company executives to face trial over their role in the financial crisis, but the complexity of the case meant a conviction was always doubtful.

Other executives in the US are also facing trial for fraud and insider trading, including 14 individuals linked to US hedge fund Galleon Group, who were arrested last week.