The only real prosecution for securities fraud relating to the subprime crisis has flopped: Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were acquitted today of fraud charges. A federal jury in Brooklyn took less than six hours to reach the verdict, after a month-long trial.

They were indicted in June 2008, a year after two funds they managed failed, costing investors a cool $1.6 billion. The duo were accused of not telling investors about the the shaky subprime-mortgage foundation of their funds.

The WSJ notes that the trial "trial was viewed a test of the boundary between putting a positive spin on bad results and outright fraud."

As my colleague James Lieber recently noted in a Voice cover story, Cioffi and Tannin were the targets of a Bush-era prosecution (and they were hardly big fish), and Barack Obama's crew has yet to launch a major securities fraud prosecution of its own.

In any case, the not-guilty verdict makes such prosecutions even more unlikely now.