Definitions

A Top Official at Bear Stearns Ousted - New York Times

"...Bear, like many other firms on Wall Street, jumped into the market for bonds that backed subprime, or high risk, mortgages, offering a slew of racy fund products, one of which hit the market last August, just before the markets began to recoil from subprime assets. Mr. Spector, who was responsible for these areas, took the blame.

While other firms might have had as much or even more exposure, Bear had the misfortune of having two funds implode, prompting investors in the funds and the firm’s stock, to question its competence in this area."

What's wrong with this whole picture?
These "hedge funds" weren't ... they were glorified cash management funds, offing a bit more yield.

hedge - Definitions from Dictionary.com:

To mitigate a possible loss by counterbalancing (one's bets, investments, etc.).

To prevent complete loss of a bet by betting an additional amount or amounts against the original bet.

Finance. to enter transactions that will protect against loss through a compensatory price movement.

Note : counterbalancing, loss protection.