[rich_sasha]

There’s a weird game-theoretic angle to it too. US regulators tend to mostly hammer down when they are confident they can win, they don’t like fighting and losing. So in a way, being told to pay a fine is seen as “pay the fine or else we’re going to court and winning”. It saves the regulators the hassle of actually proving they are right.

But of course there is then a second-order effect. If you are defending yourself against the regulators, right or wrong it is assumed the case is very strong, by all parties.

Ultimately it’s an agency problem too: regulators want (are incentivised to maintain) “clean” markets, not to send people to jail. In the short term, if their civil fine achieves it, their job is done and there is no need to drag themselves through the courts.

[xenadu02]

From a societal perspective if the threat of investigation and fines is enough to scare most people into following the law most of the time then it's a fairly cheap return on investment. It sucks that some people "get away with it" but over-zealous prosecution can have its own negative side-effects.

FWIW I do wish we'd see more prosecutions of the big cases like the financial crash or the many instances of criminal fraud in the crypto space. Like Madoff you need to catch some big fish to remind everyone that your threats are not entirely empty.

[vmception]

Additionally, major regulators (feds + ny) are in a habit of not creating monopolies by not sanctioning a company or its executives into dissolution.

To them its worse to be responsible for reducing competition, which is a fascinating prisoner’s dilemma.