A defense attorney says the government failed to make its case against two former Bear Stearns hedge fund mangers charged with lying to investors.

The attorney told a Brooklyn jury in closing arguments Friday that the government built its case on "e-mail snippets" that were taken out of context.

On Thursday, a prosecutor argued the e-mails showed that Ralph Cioffi and Matthew Tannin were guilty.

Cioffi and Tannin were accused last year of encouraging investors to stay in their hedge funds, heavily exposed to subprime mortgages, even as they knew the credit market was in serious trouble. The eventual implosion of the two funds cost investors $1.8 billion.