The principal problem at the middle management and employee level at MF Global was that the task of measuring the capital at risk from proprietary trading was not performed by executive management and that those risks were ignored after being brought to their attention (Protess & Ahmed,, 2012). Meanwhile, traders typically do not conduct thorough risk assessment of their trades and of the capital required to fund investment strategies because their competitive concerns are day-to-day and not long-term or strategic. Since the traders were not responsible for their own stand-alone balance sheets, they had little incentive to worry about the larger implications of their trades. Moreover, their income was directly linked to their sales volume, making it unrealistic to expect them to exercise greater caution than being asked of them by middle management. It is difficult to consider the actions of traders an ethical violation because managing risks associated with linking proprietary trading and other firm activities onto the same balance sheet falls outside the scope of their ethical responsibilities (Lucchetti &...

Within that framework, middle management and individual traders had comparatively little ethical responsibility to second-guess those decisions or to manage risk more carefully at their respective levels.
References

Protess, B. And Ahmed, A. "U.S. Inquiry of MF Global Gains Speed." The New York

Times (January 9, 2012). Retrieved online from:

http://dealbook.nytimes.com/2012/01/09/u-s-inquiry-of-mf-global-gains-speed/

Lucchetti, A. And Spector, M. "The Unraveling of MF Global: With $1.2 Billion Still

Missing, Corzine's Desperate Strategy Comes into Focus." The Wall Street

Journal (December 31, 2011). Retrieved online from:

http://online.wsj.com/article/SB10001424052970203686204577117114075444418.html