"Plausible deniability" is the operative phrase.  Joe Nocera on wall street scammers (and scammed) on his NYT blog:

A lot of rich, smart people who should have known better handed over their fortune to someone who turned out to be a crook. He seduced them, and in allowing themselves to be seduced, they violated the first rule of investing — diversify — because they thought they were getting a special deal that was unavailable to the rest of us. And now that it turns out that decision was as wrong-headed as a thing can be — and it has cost them a fortune — they want a government bailout? They’re kidding, right? No, they’re not.

Here's how this works:  the well placed and comfortably fixed within the structure of power, in government or industry, place their savings in a hedge fund where they can't be blamed for the inside information that is slipped to hedge fund managers "anonymously".

Eventually nearly everyone with a potential  conflict of interest has money in a hedge fund.  These individuals, congressmen, senators, management, (de) regulators all protect and enhance the "rights" of hedge funds to avoid any and all regulation and scrutiny.

It's all justified in the name of "free" market efficiency and supply side, trickle on, voodoo economics.  And of course it's also patriotic, our hedge fund managers go out into the global "free" trading battlefield and protect american power and western values.

Then when they "discover" it was all a criminal conspiracy to manipulate markets, suddenly certain bad actors, like Madoff or Martha Stewart are deemed to be the culprits (scapegoats), there's no systemic problem or reason for re-regulation.  Don't pick on "free" market fraud. 

The wealthy individuals who got their money out before the inevitable crash can then claim (im)plausible deniability.  Those who lost their ill-gotten fortunes cry and whine. 

Then we the people are forced to bailout the economy.  And told that the crooks have been caught, everything is fine again.  No need to reinstall the uptick rule and other depression era protective measures.