“Why does corruption in government always
surprise us? Why do we expect anything else from
it? Government is organized force. It takes our
wealth and makes war. And we think honest men
would do that work?” –Joseph Sobran

…and soon, The End results of this corruption.

As a student of accounting, there is one more point I would like to add. Because the regulations keep getting more complex, would-be auditors must be regulated as well to “protect” investors from corrupt auditors. This gives the state, the current certifiers, the incentive to make the certification process more and more complex. This leads to higher audit fees, leading more companies to go “private,” and avoid the SEC and auditors, or waste even more money trying to certify their books, even as the quality of the audit suffers as more and more auditors are forced into specialized roles from the complex regulations. So on top of the complex regulations on companies leading some companies to favor the current arrangement, now state certifiers and auditing firms have an incentive to protect the status quo in an ever increasing cycle.

By the way, Enron is a great case-study in the idea of <a href=regulator capture, although in this case, the opposite form where Enron hired former members of the Financial Accounting Standards Board (FASB) to create the complex financial arrangments.