When you see the title of this article: "Legalize Fraud" - you wonder if the author has lost his mind. But, when you read its content, you can appreciate that allowing the private sector to manage can frequently lead to superior results than when laws are passed controlling far more of human behavior.
White collar "crimes" like fraud or embezzlement are different from ordinary crimes like murder or theft. The victims of white collar crime are not innocent bystanders; they are shareholders who willingly purchased a company's stock. That is, shareholders entered into "contracts" with the corporation.
So an alternative to the criminal / regulatory approach to corporate misconduct is private contracts. Under this scenario, shareholders would attempt to design and enforce contracts for executives that discourage fraud. This could mean organizational structures that limit the power of any one executive, checks and balances like outside audits, and deferred compensation that is conditional on good performance.
Despite clever contracts, some fraud would still occur. But under the contracting approach, this would be a civil matter between shareholders and the corporation rather than a matter of criminal law. Government would enforce these contractual disputes. But government would not criminalize executive misconduct or independently pursue white collar "crime." Likewise, government would not regulate corporate disclosures or accounting practices; it would let asset markets dictate the kind and quantity of information necessary to make investors buy shares in corporations.
When people assume that the "nanny state" is protecting them from all, they become lax and complacent. If they realize that they are responsible for their own investments, then a combination of private resources aiding investors along with more investor awareness will result in a more equitable system