This is also an executive vs shareholder agency conflict-of-interest problem, which is a consequence of limited liability in this context. The executives have

This is also an executive vs shareholder agency conflict-of-interest problem, which is a consequence of limited liability in this context. The executives have an attractive call option. Get caught = limited downside (being fired, no jail time), and the fine is paid fully by the shareholder. Don't get caught = unlimited upside (bonus).