[SifJar]

And likewise - if they lose loads of money, isn't that a bunch of people's retirement accounts?

We're not just talking about some Wall Street traders losing some money (who can likely afford to), but regular people may suddenly be finding they can't afford to retire as soon as they had planned.

[pseudo0]

Hedge funds are only allowed to manage the money of accredited investors, people with over $1 million in assets and sophisticated financial knowledge and experience. So when a hedge fund screws up, its investors might have to put off getting a new Ferrari for a year or two, but no one is ending up destitute.

[SifJar]

Ah my mistake, I thought hedge fund clients would include pensions etc.

[Miner49er]

Do regular people have their money managed by hedge funds? I thought was just for the rich.