NEW YORK: Two former Bear Stearns hedge fund managers were acquitted Tuesday in New York of defrauding investors, in a setback for government attempts to punish Wall Street for the 2008 financial meltdown.

Ralph Cioffi and Mathew Tannin faced 20 years in prison if found guilty of lying to clients ahead of their hedge funds' collapse in June 2007.

However, a jury in Brooklyn federal court cleared the two men who said they were working for sophisticated clients and became victims of financial turmoil beyond any individual's control.

The case was seen as an attempt by the government to target the risk-taking culture blamed for last year's Wall Street collapse.

Cioffi's and Tannin's hedge funds collapsed a year before Bear Stearns imploded, making the bank one of the first big casualties of a global financial crisis.

The government prosecutor painted a picture of greed and unscrupulous trading in which the defendants protected their own fortunes, instead of warning clients about the coming collapse of the risky subprime mortgage market, which underpinned the hedge fund investment portfolios.

Prosecutors say the two managers wiped out 1.4 to 1.6 billion dollars of investors' money while earning huge compensation.

Cioffi received 17 million dollars in bonuses in 2006 on top of a 250,000-dollar salary, while his junior partner Tannin took home 2.5 million dollars in bonuses that year.

However, the defense attorney for Cioffi, 53, said his client was an "expert" trader and a veteran at a highly respected bank, which happened to be overtaken by "the greatest financial crisis since the Great Depression."