On the one had this just makes sense - the firms need to manage risk while individual investors are often looking for exactly the high risk-reward investments. On the other hand it just feels slimy.
What strikes me is how they didn't even get close to covering their losses, so either they didn't think it would get so bad, they could find enough people to cover the other side of the hedge, or they worried it would look suspicious and erode their very profitable securities businesses.
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