[3] The failure of Long-Term Capital Management, in 1998, is a well-known example where the markets were shaken by the Russian financial crisis, causing the price of corporate bonds and treasury bonds to get out of line for a period longer than expected by the LTCM's models.
This situation caused the hedge fund to melt down, and required a Fed bailout to prevent the toxicity from spilling into other financial markets.
[4] The collapse of Enron is a well-known example of the risks and abuses of Mark-to-Model pricing of Futures contracts.
Many of Enron's contracts were difficult to value since these products were not publicly traded, thus computer models were used to generate prices.
[5] In 2003, Warren Buffett criticised mark-to-model pricing techniques in the derivatives market for bringing on "large scale mischief" and degenerating into "mark-to-myth".