Much of the economic meltdown that lead to the Great Recession can be attributed to actions that were selfish, self-serving, dishonorable, or unscrupulous but not necessarily illegal under criminal or civil statutes.
One reason these violations of widely-accepted ethical standards were not illegal is that in a rapidly-changing world it is difficult for static rules to remain relevant. Any static rule can be manipulated or evaded. I’m trained both as an attorney and an accountant and I can parse words with the best of them. You task either of my professions on finding a way around a static rule and we will astound you with our creativity and ingenuity.
However, hold us to a principle: “A duty to present true financial conditions fairly and accurately regardless of the specifics of any rule,” hold our professional licenses hostage and waive the bully stick of potential civil liability… well, we might surprise you with our adherence to principle. Oh, we will bellyache about vagueness but most of us know when we are entering gray areas. Rules should provide the presumption of a safe harbor but not the absolute see no evil, get out of jail free card that they currently provide.
American regulators tend to promulgate detailed rules. Europeans tend to rely upon general principles. There is a lot to be said for combining both approaches.
“Moral courage is a rarer commodity than bravery in battle or great intelligence. Yet it is the one essential, vital quality for those who seek to change a world which yields most painfully to change.” — Robert F. Kennedy
“Moral excellence comes about as a result of habit. We become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts.” — Aristotle
“The hottest places in hell are reserved for those who in a period of moral crisis maintain their neutrality.” — Dante
NOTE: The distinction between civil and criminal liability is important. Criminal liability carries with it the risk of incarceration, thus it does and should require clear intent. The law should not be a trap for the unwary; the law should make what constitutes a criminal violation crystal clear and guilt should be established beyond a reasonable doubt. For civil violations—corporate level penalties, the disgorging of ill-gotten gains, the clawback of unearned bonuses and other compensation—a lower standard of proof, clear and convincing evidence, should suffice.