An article in the NY Times describes the Insana story. In short he didn't blew up. He just had fewer customers than he expected and no profits (3% losses), so he couldn't keep up with his office expenses. He supposedly was a fund of funds, who could had funds managed by SAC and Jim Simons; hedge funds usually closed to the public. I don't know why customers withdrew their accounts. Most investors (including me) would like to have their funds at Reinassance Tech or SAC; even if they had a -3% year.