Judge Gerald Butler QC said no fault should be attached to the jury at Southwark Crown Court for failing to come to a decision as he formally ordered that Stuart Ford, of Halifax, West Yorkshire, be found not guilty on all counts.
But the judge told the court he regretted that the option of returning a not proven verdict, as in the Scottish legal system, was not available.
Because this was the second time a jury has split, the Crown Prosecution Service will not pursue another criminal trial, although the Salvation Army has already successfully sued Mr Ford and others in a High Court action in 1995 for the loss of a total of pounds 6.6m from its funds in 1992.
Mr Ford was found to be personally liable for about pounds 2m and the Court of Appeal later rejected his challenge against the ruling.
The not proven verdict is a half-way house between discharging the heavy burden of proving guilt beyond reasonable doubt and an acquittal.
The judge said: "My duty is to enter verdicts of not guilty on these counts.
"It does occur to me we might learn something from the Scottish jurisdiction. This is not the first time a second jury has failed to agree in a case with which I am concerned.
"In the Scottish jurisdiction the judge asked the jury if they find the defendant guilty or not guilty or if the case against him is not proven.
"If we had a not proven verdict here it might assist in a case of this kind.
Major Peter Smith, the Salvation Army's Legal and Parliamentary Secretary, said: "I am pleased to say donations have remained at strong levels in recent years, despite some misinformed comments concerning the circumstances of the original loss in 1992.
"Our supporters have clearly realised that the Army was a victim of fraud and their confidence was rewarded when we announced the full recovery of all lost money."Reuse content