Adam Lashinsky
Years before the wink-wink-nudge-nudge financial shenanigans of the pre-Internet bubble grew into the Enron-Tyco-WorldCom scandals of the post-bubble era, a prominent Silicon Valley litigator I know told me he knew exactly how to stop the wrongdoing. “Throw one controller in jail, and you’ll let every other financial executive know that it’s their rear end on the line if the books are cooked,” he said.

If only it had been so easy. Instead, a culture grew up on Wall Street and in executive suites throughout the country that fudging the numbers or stretching the rules for recording revenues or otherwise sticking it to the shareholders was just fine. No one, after all, was getting caught. And everyone was doing it — and getting rich in the process.

That was then. Today, a few of the highest-profile characters from the bad old days are paying the price. As they should. This isn’t to comment directly on Bernie or Martha or Frank or any other accused executive. Their alleged crimes have been assessed by judge and jury (and, eventually, by appellate judges). The simple truth, however, is that no one is above the law, and unless all the participants in a democracy — and in a market governed by its laws — believe that, the system won’t work.

So have prosecutors gone too far? Are they hurting good companies, which in turn hurts the companies' shareholders? Perhaps. But the absence of prosecution would be even worse. That’d be a world where bad guys get away with breaking the rules and good guys play second fiddle. That’s not fair, and that’s why sending the head honchos to jail is good for the country — and good for all the other executives and their shareholders.

This weekend our Business Block has much more on how government involvment affects YOUR investments. Tune in Saturday 10am — noon ET.

Adam Lashinsky (alashinsky@fortunemail.com) is a senior writer for Fortune Magazine and a regular FOX News contributor.