[SpicyLemonZest]

Right, it's a pretty general argument. A good regulatory system can't just threaten to throw CEOs in jail whenever a bad thing happens and we think they should've stopped it. You have to keep track of the incentives you're establishing, and make sure they encourage people to do what you want and not do what you don't want.

[easyat]

Agreed. But to say that there shouldn't be more mechanisms to disincentive this behavior because they will simply be skirted is self-defeating. Why have any regulations?

[SpicyLemonZest]

Agreed, but the point is that this particular mechanism doesn't disincentivize the fraud. The CEO of Wells Fargo has pretty much no power to stop an individual sales rep from lying on an account form, and neither that sales rep nor their manager is going to stop lying because we've threatened the CEO with jail time. The only thing the CEO could do to reduce their risk of going to jail is try and stop investigations from turning up evidence of fraud.