My fav was a Japanese fund that lost about 70% of their equity a few years back. The loss was substantial but the real kicker was the fund's name was, get this, Ifukku. Seems like the investors should have known what they were getting into on that one (at least phonetically speaking). Lastly the name reportedly meant something like "Infinite Luck". Here's another financial linguistic mishap from the far east: http://www.tse.or.jp/mothers/index.html . Gives a new meaning to the term "I'd sell my Mother." Now you can!
If you know anywhere to get some material on some of these disasters let me know thanks- ifukkimyself sometimes
I'll attempt to add omething a little more useful. A few years back Derivatives Strategy Magazine had a list of the biggest trading scandals. You can find it here: http://www.derivativesstrategy.com/magazine/bestof/trading_Scandals.asp . Their "best of" section offers some entertaining reading.
Well, its a few years more back, but I guess the Hut brother' s failed attempt to corner the silver market in the 80's was a major disaster: within one decade, their status has changed from being among the 10 richest people in the world to being totally ruined. Many arabs were involved, and even the fed was forced to intervene. Haven't experienced it myself, but from what I've read so far the whole development of the story back then must really have been awesome, also by todays 'standards'...
I recall that the California state pension fund took a mean hit or derivatives a few years ago. It was a big scandal.