"This will go down in the history books as one of the greatest fiascos of banking in 100 years," said Mr Roman, who co-runs London and New York-based GLG, a former division of Lehman Brothers Holdings with assets of $24bn (£14.8bn). "There need to be some scapegoats, and the regulators are going to go hunt people. That will be good in the long run."
His views were echoed by Professor Nouriel Roubini, a former US Treasury and presidential adviser known for his accurate prediction of financial crises, who estimated that up to 500 hedge funds would fail within months.
Both men were speaking at the same hedge fund conference in London on Thursday, and Prof Roubini said he would not be surprised if the US and other countries soon had to close their stock markets for more than a week to halt descent into "sheer panic".
The economist warned that the world is heading for a protracted recession that will end the US's financial dominance.
"It's the beginning of the decline of the US financial empire. The Great Depression ended in a massive war. I hope that's not going to happen but it's pretty ugly now," Prof Roubini said.
He added that turmoil over world trade, currency markets and debt is likely to cause geopolitical tensions between the Western world and emerging superpowers such as Russia, China and "a bunch of unstable oil states".
The conference saw analysts, economists and hedge fund managers discussing the possibility that global recession could now last two years on fears that government bail-outs and nationalisations have failed to stop the markets slumping.
"We're now paying the price for the biggest asset and credit bubble in history," Prof Roubini said, advising investors to stay clear of risky assets and keep their money in cash. "The bail-outs have not worked because the markets are no longer rallying, and the policy-makers have run out of options."
The global financial meltdown accelerated this month, with the UK and US governments being forced to take stakes in some of the world's biggest banks. Stock markets around the world have fallen sharply this month as investors' concern switches to the impact on the wider economy.
"It's like we're walking blind in a minefield," said Prof Roubini. " Every situation has become risky and no one can trust each other. The banks are too big to be allowed to fail, but they're also too big to be saved."
He said that the problems were not just caused by the US sub-prime market, but all kinds of risky lending the world over – from mortgages and cars to student and commercial loans.
Research from Hedge Fund Intelligence (HFI) shows that despite one of the worst months on record for credit funds, US hedge funds alone still have $1.7 trillion (£1 trillion) in assets.
"Hedge funds usually thrive in such turbulence, but this time [have] had to manoeuvre in chaotic markets with a lack of leverage, jittery investors and an inability to short the best stocks," HFI's analysts said. "But in aggregate, hedge funds are still managing to stay afloat."