"The people we're regulating are really clever so we can't tell you what the rules are" Is a terrible way to handle things.
When you are dealing with sociopaths (i.e. most of the industry that the SEC regulates), reason and compassion are useless as tools for getting people to do the right thing ... but fear still works.
Where was this proven? My experience is the opposite. Inconsistent enforcement makes people think they can get away with breaking the rules. And because the enforcement is inconsistent, they have a guaranteed non-zero probability of succeeding.