In a stunning defeat for the Justice Department, a federal jury in Brooklyn, N.Y., found two former Bear Stearns hedge fund managers not guilty of fraud charges Tuesday, only a day after jurors received the case.

According to The New York Times, the jury found that Matthew Tannin and Ralph Cioffi did not lie to investors in painting a rosy picture of the health of two funds backed by subprime mortgages which later collapsed and cost investors $1.6 billion.

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