Two former hedge fund managers at Bear Stearns agreed to a settlement with the Securities and Exchange Commission that would avert a civil trial over allegations related to a $1.6bn blowup during the financial crisis.

Ralph Cioffi and Matthew Tannin won't admit to wrongdoing as part of the deal to settle civil-fraud charges filed against them by the SEC in 2008, according to people familiar with the matter. The two men are expected to pay a financial penalty, these people said, but the amount wasn't clear as of Thursday night.