Two former Bear Stearns fund managers, Ralph Cioffi and Matthew Tannin, have been found not guilty of misleading investors about the subprime mortgage market at the height of the real estate boom. The men, who were facing charges of conspiracy, securities and wire fraud and up to 20 years in prison, were the first to be tried after a federal probe into the subprime mortgage bust that brought their hedge funds bankruptcy and triggered the recession. Cioffi and Tannin were indicted in June 2008 and the trial began Oct. 13. Prosecutors argued that an e-mail sent by Tannin to Cioffi’s wife April 22, 2007, entitled “Things to Think About” and reading “The entire sub-prime market is toast,” is evidence that the two men had defrauded their clients. The defense said the funds failed because of the credit crunch, and that the duo was “honestly optimistic” about subprime loans up until the very end. This afternoon’s decision may weaken the U.S. Justice Department’s case in additional securities fraud charges related to the subprime collapse.