Ralph Cioffi, after his arrestThe two former Bear Stearns hedge fund managers accused of lying to their clients as their funds collapsed were acquitted on all charges this afternoon.

Ralph Cioffi and Matthew Tannin had been charged with securities fraud and wire fraud—Cioffi also faced a count of insider-trading. But despite a series of e-mails in which both men seemed to be painting a gloomy picture of the subprime mortgage market privately while assuring investors that nothing was out of the ordinary, it took the Brooklyn, N.Y., jury less than two days to find them not guilty.

Neither man said much as they left the courtroom. Tannin said nothing at all; Cioffi offered a simple, “I’m happy.”

The Bear Stearns High-Grade Structured Credit Fund and a more highly-levered sister fund, managed by Cioffi with Tannin serving as chief operating officer, collapsed in the early days of the subprime mortgage crisis two-and-a-half years ago. The funds’ demise cost investors some $1.6 billion and helped precipitate the eventual collapse of Bear Stearns itself.

The month-long trial featured a good deal of bickering between the government and the defense attorneys, much of it over e-mail and whether the two men were seeking to conceal or destroy evidence. And while things went very badly for the prosecutors in the early going, it had been thought that the government had landed some blows as it wrapped up its case. Neither Cioffi nor Tannin took the stand in his own defense.

Had they been convicted of all charges, Cioffi would have faced up to 40 years in prison, with Tannin looking at 20 years.