Two former Bear Stearns hedge fund managers were found not guilty of securities fraud in Brooklyn federal court after a three-week trial that was viewed a test of the boundary between putting a positive spin on bad results and outright fraud.

The verdict brought to an end a two-year saga involving the former managers, Ralph Cioffi and Matthew Tannin, who were accused of lying to their investors about the health of two mortgage-related funds that collapsed in 2007. Those failures were the first of several blows that felled Bear Stearns and marked the arrival of the credit crisis.