Raj Rajaratnam, the erstwhile hedge fund titan currently serving an 11-year sentence in a federal prison on a 2011 insider trading conviction, has to be wondering “Why me?”

Despite the intense scrutiny of prosecutors, regulators and Congress on all manner of Wall Street shenanigans in the wake of the 2008 financial crisis, Rajaratnam remains the only top-tier decision maker to be convicted and jailed for a crime against investors. That is, you and I.

Former Goldman Sachs (GS) bond salesman “Fabulous” Fabrice Tourre was convicted in August of lying to investors in a high-profile civil case. So what? He’s free on appeal and, besides, who really believes justice was served in a case filed against a twenty-something, middle-management salesman with a memorable name and bad judgment in e-mails?

Who at Goldman signed off on Tourre’s deals? Isn’t that what prosecutors should have been pursuing?

Now consider the landmark settlements reached in November between federal prosecutors and two Wall Street power houses.

In the first, SAC Capital, the giant hedge fund run by the legendary Steven A. Cohen, agreed to pay $1.8 billion for apparently creating a unique investment strategy far more dependant on insider trading than corporate earnings reports.

In the second, JPMorgan Chase (JPM) was hit with a record-setting $13 billion in fines for misleading investors about the quality of mortgage-backed securities in the run-up to the global economic meltdown.

No Individuals Held Accountable

In neither instance was any individual named as a responsible party or held accountable for the actions of the larger firm, circumstances that conform neatly to a pattern established ever since the government began loudly vowing to crack down on Wall Street in an effort to protect investors.

And that’s frustrating.

Especially in the case of the former, the government’s long-running battle with SAC Capital. In a 40-plus page criminal indictment unsealed in July prosecutors alleged that various unnamed SAC bosses essentially hired the firm’s fund managers based on their abilities to collect and trade on illegal inside information.

Indeed, the indictment said one employee was hired by SAC even after a prior employer, a rival hedge fund, had warned SAC that the money manager had a history of insider trading.

Not a problem at SAC, according to the complaint.

But forget the second-tier guys. Under the terms of the settlement announced on Nov. 4, Cohen SAC’s founder and undisputed leader, can no longer manage outside money but is free to continue managing his own fortune, said to be worth about $9 billion.

“Not a bad deal.  Pay a few billion in penalties and keep the rest. Insane,” noted Chicago-based securities lawyer Andrew Stoltmann.

Criminal Charges for Cohen Possible But Unlikely

Preet Bharara, the U.S. Attorney for the Southern District of New York, stressed that the deal did not preclude future criminal indictments against Cohen or any other SAC employee. But without evidence directly tying Cohen to specific acts of insider trading, a criminal conviction seems unlikely.

Rajaratnam was felled by damning, wiretapped conversations with underlings in which he urged them to use inside information to generate profits. Apparently no such smoking gun exists in the SAC case. Instead, the case was built on information provided by a handful of former SAC employees who have pleaded guilty to insider trading and have cooperated with investigators. None of them have apparently pointed the finger directly at Cohen.

Which brings us to Matthew Martoma, the SAC fund manager arrested last year on insider trading charges who prosecutors say was in frequent contact with Cohen but who has refused to cooperate with prosecutors.

“The fact that Matt Martoma didn't flip was huge,” observed Stoltmann. “He could have provided a road-map for prosecutors.”

Cohen and his firm have been accused of many things recently. Being stupid isn’t one of them. SAC Capital is paying Martoma’s legal bills.

The big “get” in the settlement with JPMorgan was the firm’s acknowledgement that it knowingly sold toxic mortgage-backed securities to investors while claiming the securities were solid investments.

Nowhere mentioned in the settlement were the individuals who made those claims and the executives who devised the overall strategy to push toxic mortgages. In other words, no one was held accountable.

Deals Piled On Atop Another

The sweeping $25 billion national mortgage settlement reached in February, 2012, with JPMorgan, Bank of America (BAC), Ally Financial (formerly GMAC), Citigroup (C) and Wells Fargo (WFC) was criticized for the same reason.

Not a single person who acted badly was held responsible for their actions. Instead, the banks wrote off the fines as one-time losses and the only people hurt – temporarily – were shareholders.

Here’s the irony. Every time one of these settlements is announced the top prosecutor – frequently Bharara – declares that investors are better protected and markets well served now that such misdeeds have been revealed and ostensibly eradicated. Through these settlements, the officials invariably boast, investor confidence is being restored to the markets.

But in fact the opposite is true. Investor cynicism has only deepened as these settlements have piled one atop another, the latest fine larger than the last. The perception seemingly confirmed time and again that if you’ve got a few billion to spare you can make just about any charges go away.

Not exactly a confidence booster for the guy who doesn’t have a few billion to spare.

Follow Dunstan Prial on Twitter @DunstanPrial