Now let's be honest, John Mack is VERY well politically connected & an utter scumbag. The mid level SEC prosecutor who was gunning for him because it was pretty much an open & shut case ended up being fired. The top level officials would never give this guy the go ahead and when he started making waves, including contacting the newspaper, he was quickly shut down and kicked out.
There are two ways to look at from a very realistic, factual & logic point.
1) SEC works on a budget and investigations along with the following cases cost money. Taking on a big IB is something the SEC has problems undertaking. Their best bet is usually to make a deal, like pay us 5% of what you made during the tech boom as a fine. Then we make a big deal of it to show that we are reprimanding the offenders.
Same goes for going up against people like John Mack who will pull strings and also have quite some resources. It may end up costing too much and never result well. It may also hurt their personal & working relationships with politicians and other government officials.
2) Do a cross check on SEC top dogs, politicians and top execs of the big boy IBs, the exchanges, top hedge funds and some specialty organizations like CFR, Carlyle Group, etc. You will find A LOT of interesting overlays.
To quote Gordon Gekko from Wall Street:
"Now you're not naive enough to think we live in a democracy, are you Buddy?"