The two founders of the Bayou Group, as expected, pled guilty to charges that they had fraudulently squandered millions of their investors' money. Samuel Israel III faces up to 30 years, and Daniel Marino faces up to 50 years. A lot of unanswered questions remain about this sad saga. The big question: What exactly became of the funds? Arizona authorities have seized $100 million in what is likely Bayou money, but it is unclear how the remaining $350 million was frittered away. All this comes at a bad time for foes of additional hedge fund regulation.

> Here's a New York Times article.
> More on the double life of Samuel Israel. Article