Jon Corzine’s reckless governance

The Washington Times reports:

MF Global issued $325 million of 6.250 percent, 5-year senior notes in August 2011. The deal was led by Jefferies, a global investment banking group, and co-managed by investment banks BofA Merrill Lynch, BMO Capital Markets, Commerzbank, Natixis, Lebenthal & Co. LLC, Sandler O’Neill and Partners L.P., and U.S. Bancorp. I provide this backdrop because you have to see that once again those who have a fiduciary responsibility to protect investors failed.

The banks on this deal are underwriters of securities who are obligated to perform due diligence on the issuer (MF Global) to protect investors. I have no doubt that the bankers performed their due diligence on the objective facts about the company; e.g. financial statements, management background, market share, customers, etc. But did the bankers adequately assess the character of MF Global’s management? Is it possible for a banker to protect investors from managers with impeccable credentials who are willing to take reckless risks with other people’s money?

The disaster known as Jon Corzine.