Fortune Magazine has a fascinating story on hedge fund giant Citadel. I outline several interesting aspects:

>How was it hit by Lehman tsunami;
>How its stat. arb strategies faltered due to SEC’s short ban;
>How its strategy of buying investment grade bond hedged with credit default swap failed to work;
>Was Citadel asking for a government bailout? And how Citadel killed the rumor that almost killed the company.

Recent development: Citadel froze investor redemptions through March. It’s still not clear whether the storied hedge fund will eventually survive.