All kinds of activities are part of "the market." It sounds like you're equating the "market" with the sobering final reckoning and not counting all the "irrational exuberance" and chicanery as part of "the market."
I'm not saying that markets are to blame or free markets caused this, but I don't think one can simply and entirely absolve "the market" from things that happen in market situations.
I suspect "the market" -- that sobering final reckoning and liquidation of the whole mess will solve this, but I can't say that all of the antics that led up to this weren't a part of market activities.
The free market naturally punishes "irrational exuberance and chicanery". The question now is why didn't it do so this time and if you follow that line of inquiry it will lead you right back to government interference.
We can expect business failures and we can expect criminal behavior. But such things should be randomly distributed in time and across the various sectors of the economy. When so many simultaneous occurrences happen in a single market sector we can be certain it is not happening naturally - it's not being caused by the market.