The case for the prosecution of hedge funds is already familiar enough. But that does not make the allegations any less powerful or damning. The argument, simply enough, is that during the economic crisis hedge funds conspicuously failed to do what they said on the tin. The charge is not just that they delivered beta masquerading as alpha. It is also that they were unable to offer liquidity when it mattered, with extensive lock-ups and gating leaving their investors frustrated and angry. Other complaints were that some investors appeared to enjoy preferential treatment over others, and that hedge fund documentation was shown to have been opaque and feeble.

Steve Prince, Silver Creek Capital Management, Martin Fothergill, Deutsche Bank and Pierre-Yves Moix, Man Investments

The case for the defence, meanwhile, centres chiefly on two arguments. The first is that the crisis of 2007-2008 was the product of an unprecedented combination of...