Two former Bear Stearns hedge fund managers charged with fraud have been found not guilty by a New York jury.

Ralph Cioffi and Matthew Tannin were cleared of charges including securities fraud and conspiracy charges relating to the collapse of two hedge funds.

Prosecutors had argued the two managers lied to clients to protect bonuses when their funds were losing money.

The hedge funds bet on the high-risk sub-prime mortgage market in the US before they collapsed in June 2007.

Their closure was one of the first signs of the problems in the sub-prime market, which triggered a massive loss of confidence in financial markets.