You also need to protect against passthrough bonds. If pirate turns out to be a ponzi, this could also create a huge problem. A diversification requirement would not even solve this as there are multiple pass throughs to invest in. Your best bet IMHO is to do the research on the issues yourself, and then allow others to invest in issues that you believe are safe.
Personally, I'm one to shy away from the pass-through bonds, but I suppose I would let lenders dictate the terms of the account however they want as long as they're willing to assume the risk.