The verdict in the Bear Stearns fraud case has far-reaching implications for Wall Street execs, and it's all good — for them.

Ralph Cioffi and Matthew Tannin were found not guilty in Brooklyn federal court of fraud and other charges related to their blatant lying about their hedge funds, which were built on the subprime-mortgage house of cards.

In the only federal prosecution so far of any of the goniffs who helped cause last year's Wall Street meltdown, they got away with murder (of their investors' money), if you read the last year's indictment. Even their participation in the homicide of Bear Stearns (their funds lost almost $2 billion) was blessed by the jury, which said the prosecutors didn't give them enough evidence.

According to the indictment, back on March 2, 2007, Cioffi and Tannin were freaked out by their funds' extremely shaky — even doomed — liquidity because the subprime mortgages underlying the CDOs they were peddling were collapsing. They drank "a vodka toast" privately just for surviving the previous month without having to fold their huge hedge funds, and they kept their worries to themselves, not even telling their bosses, apparently. To investors, however, they lied, saying everything was hunky-dory (lie) and that they were putting their own money into their funds (lie).

The next day, March 3, according to the indictment, Cioffi told Tannin that things could be worse: "[W]e have our health and families ... [w]e are not a 19-year-old Marine in Iraq. ..."

Twelve days later, on March 15, 2007, despite that gloom and doom about the health of their hedge funds, Tannin told an investor (according to the indictment), "[W]e are seeing opportunities now and are excited about what is possible. I am adding capital to the Fund. If you guys are in a position to do the same I think this is a good opportunity."

At the end of that month, Tannin emailed a colleague, "[B]elieve it or not — I've been able to convince people to add more money. ..."

In June 2008, as the two were led away in handcuffs, the FBI's New York chief, Mark Mershon, declared to the New York Times, "This is not about mismanagement of a hedge fund investment strategy. It is about premeditated lies to investors and lenders."

But former federal prosecutor Robert Mintz had the best take at the time, telling the New York Times: "We have to be wary of a rush to judgment. The question is whether these managers crossed the line from permissible spin to willful misrepresentation."

Yesterday's verdict, though, means that "willful misrepresentation" is "permissible spin."

So relax, Wall Street execs. And keep worrying, Wall Street investors.