Daniel Penny Found Not Guilty in NYC Subway Chokehold Trial

11:27 AM -- Penny was all smiles and in a celebratory mood after his acquittal. Check out this photo of him grabbing a few beers with his lawyers, Tom Kenniff and Steven Raiser, inside a bar.

Daniel Penny -- the man who choked Jordan Neely to death on a NYC subway -- has been found not guilty of criminally negligent homicide Monday, according to his attorneys, Tom Kenniff and Steven Raiser ... after prosecutors dropped a manslaughter charge Friday when the jury deadlocked.

The jury of 7 women and 5 men had been deliberating since Tuesday last week in the case -- they deadlocked twice on Friday, telling the judge they could not reach a unanimous verdict. Penny was facing charges of second-degree manslaughter and the negligence count. Prosecutors then moved to drop the manslaughter charge, and the judge allowed it, instructing the jury to consider only that count.

The central issue during the trial ... was whether Penny was justified in placing 30-year-old Neely in what turned out to be a fatal chokehold after witnesses claimed Neely was threatening passengers on a NYC subway car on May 1, 2023.

Prosecutors alleged Penny acted recklessly, while his defense team argued he was trying to protect fellow subway riders from a threat.

A Marine veteran, 26-year-old Penny was charged in June 2023 following his arrest on May 12 ... which sparked massive protests in the Big Apple.

The medical examiner ruled Neely's death a homicide due to "compression of neck."

Penny maintained his innocence throughout ... and pled not guilty.