Societe Generale: SocGen's Jerome Kerviel blew up 4.9 billion euros with another rogue trader scandal.Bear Stearns: $1.6 billion collapse of highly leveraged hedge funds in mid-2007-one of the first distress signs in the credit markets.
Black swan events, such as the coronavirus epidemic that continues to severely cripple global economic activity in 2020, has the potential to cause corporate blow ups, particularly in the hospitality, tourism, and travel industries amid the closure of national borders, bars, clubs, and restaurants. As funds fail to perform, investors may withdraw, forcing the fund to dissolve or blow up. Often a hedge fund is so highly leveraged that losses can be catastrophic, and since a hedge fund can have extremely large portfolios, even a small percentage loss can lead to huge cash losses. Hedge funds frequently engage in high-risk investment tactics and often invest in alternative assets to aggressively accumulate capital gains.
A blow up describes the complete and abject failure of an individual, company, or hedge fund.
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