NEW YORK, NY November 11, 2009 —Two former Bear Stearns hedge fund managers were found not guilty on fraud and conspiracy charges in the first criminal trial of Wall Street executives to emerge out of the collapse of the subprime mortgage market. Ralph Cioffi and Matthew Tannin were accused of misleading investors in the months leading up to their funds' collapse. WNYC's Lisa Chow reports.

REPORTER: To prove their case, prosecutors had relied heavily on emails between the two defendants and their investors. Yesterday jurors said the evidence, which was mostly circumstantial, failed to prove that Cioffi and Tannin intended to defraud investors.

Daniel Richman is a law professor at Columbia. He says yesterday's verdict undermines the belief by prosecutors and fear by defense attorneys that juries will jump at the chance to convict fat-cat executives during the down economy.

RICHMAN: This is a case, or at least this is a jury that shows that that doesn't necessarily happen, that juries really do have the discernment to think through the particulars of each case.

REPORTER: Richman says he believes that federal prosecutors will continue to bring an array of white collar cases, but that now, they may be more careful in the types of evidence they present. For WNYC, I'm Lisa Chow.