A jury acquitted two former Bear Stearns hedge fund managers of lying to clients about the health of their investments, according to media reports Wednesday.

Ralph Cioffi, 53, and Matthew Tannin, a 48-year-old law school graduate, not found not guilty of securities and wire fraud charges.

Prosecutors claimed the alleged fraud cost 300 investors about $1.6 billion. The defense argued, however, that Cioffi and Tannin were themselves victims of the financial crisis and managed their investors’ money the best they could.

In a statement, the United States attorney’s office for the Eastern District of New York expressed disappointment with the outcome:

“Of course, we are disappointed by the outcome in this case, but the jurors have spoken, and we accept their verdict.

Honesty and integrity are the principles upon which our financial markets function. Enforcing and protecting those principles will continue to be one of the principal efforts of this Office.

I want to take this opportunity to thank the jury for its service and to congratulate the government’s trial team of Assistant United States Attorneys Ilene Jaroslaw, James McGovern, Patrick Sinclair and Special Assistant United States Attorney Brian Sano; Jay McMahon, Supervisor of the U.S. Attorney’s Office Business/Securities Fraud Section; and Paralegal Specialist Jo-Ann Karsohn for the extraordinary job they did in investigating and prosecuting this case. I also want to extend my deep appreciation to the Federal Bureau of Investigation, New York Field Office, and the United States Securities & Exchange Commission for their most helpful assistance and cooperation.”

Two Former Bear Stearns Managers Found Not Guilty of Fraud