Regulators have very little to do with how law is meant to work in theory, especially in the USA. Financial regulators are pure extensions of arbitrary governme

Regulators have very little to do with how law is meant to work in theory, especially in the USA. Financial regulators are pure extensions of arbitrary government power: they can make up new laws on the fly without Congress, and many rules are phrased vaguely enough that anyone could be violating them if they want it that way. Basically financial regulators can fine or imprison anyone in the financial system at any time for any reason or even no reason, unaccountably so. Not surprisingly this power gets abused. These firms were told they would be attacked and punished for working with Facebook, so of course they baked away.