Goldman Sachs stands accused of doing both these things: insuring itself against something it actually controlled, and selling its customers securities based on assets it was privately shorting.

They have been seriously hit by financial market turbulence and earnings have declined. It also points that hedge funds have lower assets under management compared to other investment vehicles (like Sovereign funds) and cannot really disturb markets. Moreover, most hedge funds are pretty small and cannot do damage on their own.

On October 2, the U.S. House Oversight and Government Reform Committee announced a Hearing on Regulation of Hedge Funds scheduled for Thursday, November 13, 2008. The focus is on the causes and impacts of the financial crisis on Wall Street, and the Committee will hear from hedge fund managers who have earned over $1 Billion