Short-selling hedge funds, Morgan Stanley’s chief financial officer supposedly said during the depths of last year’s crisis, are like “cold blooded reptiles. They eat what’s in front of them.” Lately, however, some hedge funds have more closely resembled a house of cards, where a single knock can bring the whole thing down. Indictments for alleged insider trading from the Federal Bureau of Investigation and Securities and Exchange Commission are undoing Galleon. Meanwhile K1, a European fund of funds, may quickly come under pressure after German prosecutors said they were investigating possible fraud by its founder, Helmut Kiener.

If the allegations against Galleon and K1 are proved, such scandals – alongside Bernard Madoff’s – will be different in form but still have two things in common. The first is the length of time they allegedly carried on their game. Prosecutors claim Galleon’s insider trading scheme dates back to at least January 2006. Mr Kiener allegedly kept his creditors in the dark long enough to land them with about $400m of losses. And Mr Madoff spent years executing his Ponzi scheme.