Do you think those who've turned fraud into a general business tactic are innocent of any crime? If that fraud is committed by a multi-national banking organization, should federal investigators ignore the crime and rely on states to prosecute state-by-state?
I guess my point is, she's not talking about regulation (though she is talking to regulators). She is talking about how these people handled CRIME that was commmited.
I see how your point addresses the libertarian perspective, 'let the market choose what investment companies are good!' but investment fraud, in my opinion, should be a punishable offense.