Derivatives allow investors and institutions to break apart (i.e., segment) risks. Conversely, derivatives can be used to manage risks on a joint basis. The financial engineers responsible for devising complex instruments do so to satisfy the risk-return appetites of their clients. But financial engineering is not by itself risk management, and in the world of derivatives the line between hedging and speculation can be blurry. Case studies that feature financial engineering by way of complex derivatives include Bankers Trust and the Orange County case. In regard to these financial engineering cases. Which of the following statements is false?