In the FCIC’s report on what caused the financial crisis we came across this gem:
Some mortgage securitizers did their own due diligence, but seemed to devote only limited resources to it.
At Morgan Stanley, the head of due diligence was based not in New York but rather in Boca Raton, Florida.
He had, at any one time, two to five individuals reporting to him directly—and they were actually employees of a personnel consultant, Equinox.
The information about Morgan Stanley came from an interview with a man called Tony Peterson last October.
The report also said that Deutsche Bank and JP Morgan had only small due diligence teams too, but we’re guessing they weren’t based in wealthy, retirement enclave in Florida.