A former editor at Gawker Media’s gadget site will not face criminal charges for buying a mislaid iPhone prototype from a man who found it in a Bay Area bar last year and put it up for sale instead of returning it to Apple.

Former Gizmodo editor Jason Chen was raided by police in 2010 following a bombshell story detailing the 4G iPhone prototype, which had been lost at the Gourmet Haus Staudt in Redwood City.

The phone had been left behind by an Apple engineer, and found by 22-year-old Brian Hogan, a patron of the bar who approached several technology news sites offering to sell the unit. (Wired.com received an e-mail at the time — not from Hogan — offering access to the iPhone, but did not follow up on the exchange after the tipster made a thinly veiled request for money.)

Gizmodo wound up paying $5,000 in cash to get its hands on the device, which Apple had not announced yet. After the story published, and following a direct appeal from Apple’s Steve Jobs, Gawker Media returned the prototype to Apple with some damage, according to court records.

Brian Hogan in a 2008 blog photo.

On Wednesday, Hogan was charged with one count of misappropriation of lost property, and a man named Sage Wallower, 28, of Emeryville, was charged with misappropriation of lost property and possession of stolen property — all misdemeanors unlikely to carry a jail sentence.

“After a consideration of all of the evidence, it was determined that no charges would be filed against employees of Gizmodo,” San Mateo County District Attorney Steven Wagstaffe announced in a press release.

“While we have always believed that we were acting fully within the law, it has inevitably been stressful for the editor concerned, Jason Chen, and we are glad that we can finally put this matter behind us,” Gawker Media said in a statement.

Hogan’s attorney, Jeffrey Bornstein, described his client as “remorseful” on Wednesday. “Although we do not believe that charges of any kind should have been filed, Brian fully accepts responsibility for his action,” Bornstein said in a statement. “We are working cooperatively with the District Attorney to resolve this misdemeanor charge promptly.”

Gizmodo’s checkbook gadget scoop spawned vigorous debate last year over journalistic ethics in the age of blogging, while the intense police investigation — spurred by Apple — drew fire for encroaching on journalist-source protection.

Gizmodo kept the source of the phone confidential in its story, but, as first reported by Wired.com last year, police zeroed in on Redwood City resident Brian J. Hogan. A tip from one of Hogan’s roommates sent police racing to his home, and a strange scavenger hunt ensued for evidence that a friend of Hogan’s had scattered around the Silicon Valley community.

Police recovered a desktop computer stashed inside a church, a thumb drive hidden in a bush alongside the road and the iPhone’s serial-number stickers from the parking lot of a gas station.

Police also served a search warrant on Chen’s home while he wasn’t there. Gizmodo challenged the legality of the search, but later reached a deal with prosecutors to have Chen’s computer returned in exchange for specific material sought in the investigation.

Apple told the police at the time that the publication of Gizmodo’s story was “immensely damaging” to the company, because consumers would stop buying current-generation iPhones in anticipation of the upcoming product. Asked the value of the phone, Apple told the police “it was invaluable.”

Top photo: Former Gizmodo editor Jason Chen/Gizmodo

(With previous reporting by Kim Zetter, Brian X. Chen, Evan Hansen, Dylan Tweney, Roselyn Roark and David Kravets)