This is the part of a new series of columns called "The Naked Truth," by retirement expert Dan Solin. Please bring him your questions, in the comments box, and he will answer as many as he can.

Ralph Cioffi and Matthew Tannin were indicted on June 18, 2008. They are accused of a litany of fraudulent activities in connection with the demise of two hedge funds they managed for Bear Stearns.

Cioffi and Tannin are entitled to the presumption of innocence. The obligatory "perp walk," staged for the benefit of the press, is offensive to traditional notions of justice. Not only does it demean and humiliate them, it taints the jury pool and intrudes upon their right to a fair trial.

Nevertheless, the indictment offers an insight into conduct that would otherwise be inexplicable.

Here are two highly educated, sophisticated, fund managers who achieved the American dream -- and then some. Why would they risk it all by, as alleged, misrepresenting the risk of these funds, and their personal stake in them?

The answer lies buried deep within the indictment. Shortly before the collapse of the funds, Cioffi is alleged to have stated: "[i]f I can't [turn the funds around] I've effectively washed a 30 year career down the drain."

The total loss to investors in these funds is estimated to be around $1.4 billion. All of this money was washed "down the drain," along with Cioffi's career, and perhaps his freedom.

The allegations in the indictment raise troubling issues about the mentality of Wall Street. Is it really all about them? Will they say or do anything to separate us from our money?

I am not excusing investors from personal responsibility. Any time you are told that you can achieve high returns, with little or no additional risk, a red flag should go up.

The irony is that there is precious little data supporting an investment in any hedge fund. They are poorly regulated and the majority of them under perform their benchmark. Investors would be far better served by investing a properly allocated, globally diversified portfolio of index funds.

What's the takeaway message from this debacle?

There are obviously good and bad brokers and advisers. But the problem with the system is that the interests of those making recommendations to investors are often in conflict with the financial well-being of their clients. The temptation for some is to lie and cheat. For others it may be more of a subconscious tilt towards a recommendation that generates the most fees.

I really don't care about their motivation. Since I don't believe they can "beat the markets" with any persistence, I refuse to use their services.

When I deal directly with major fund families, like Vanguard and Fidelity, and confine my purchases to their low cost index funds, it is all about me.

And that's the way it should be!

Dan Solin is the author of The Smartest Investment Book You'll Ever Read (Perigee Books 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, June 24, 2008). Visit his website at Smartestinvestmentbook.com.