Making the shareholders legally liable is a bad idea. To start, it defeats one of the primary purposes of incorporating (more companies would remain as private entities, and enjoy lower taxes and fewer reporting obligations). In order to justify shareholder liability, more individual control by the shareholders would be necessary. Think of what the decision process would be like if America were a pure democracy. If voters were responsible for what their elected officials did (think corruption by our officials), then we would demand more control over their actions - Why have them if we make all the decisions anyways? The same is true for corporations. Shareholders elect board members, who in turn elect managers who run the company.
The execs are responsible if they commit fraud via the company. I think that making the board of directors as responsible as the management is a good idea, since it requires the board to police the company, instead of turn a blind eye to the management team's fraud when it's producing positive returns. The individual shareholders though, should not be liable for the actions of an often distant management.