Mutual funds and 401k’s have almost completely divorced shareholders from the companies they own. Most of the supposed checks and balances of public companies are merely performative at this point.

Partnerships are run more like guilds than public companies. Many years ago my friend was offered partnership track to a medium-sized accounting firm. It was something like a $1.5 million up front payment to join, but they had partner banks who would give you the loan with a long (30 year?) payoff like a mortgage, so every time a new partner was added it diluted the profits, but all of the existing partners got an immediate payoff. And there are tiers of partners, so a junior partner gets way less profits, like a pyramid (isn't everything like this?). I assume VCs, law firms, and similar partnerships operate the same.

So arresting the partners involved in this makes sense, as it is more like a group of individual rainmakers working under one brand rather than a traditional company.

And my friend didn't join, instead he switched to small firm where their employees were like strike-force mercenaries. He had a specialised skillset and was willing to move anywhere for a year at a time. Wound up going from ~$150k in 2008 money to over $400k with the insane travel sacrifice schedule, overtime, etc. He is still there but manages the young people doing that while working from home, and makes good money still.

I own a highly profitable small-ish business where I want longterm employees, but my incentive is staggering payments so your profits balloon after staying 5 years, but then you have to wait 7 more years to get all of your profits, so each year you get another 7 year profit vesting. So the handcuffs are very reinforced to prevent people leaving. Some people still leave though, but very small turnover at the VP / senior leadership level.

Did E&Y not face any consequences here and why not anyway?

Apparently two EY partners did suffer some repercussions. Not Arthur Andersen scale, but CUC wasn't Enron scale either.

They're either very stupid or complicit. Neither should surprise anyone.