Lessons of the Fall: Hedge Funds Go Legit in Shadow of LTCM's Demise

Last fall, Long Term Capital Management, a billion-dollar Greenwich, Conn., hedge fund run by bond guru John Meriwether and a cadre of quantitative whiz-kids and Nobel Prize winners, nearly tanked -- almost taking the U.S. stock market with it.

LTCM was eventually rescued by its Wall Street lenders in a bailout engineered by the New York Federal Reserve Bank a year ago this evening. The resulting $3.5 billion rescue plan, hammered out by the heads of 14 major financial firms, sent shivers down Wall Street. ...