You're kidding, right?
The criminals are at the forefront of the process, in gigantic institutions with no effective oversight, or in places like Freddy Mac and Fannie Mae, where they have direct access to the cash cow.
The real victims, what you call 'the investors', the millions of individuals in retirement accounts twice or three times removed from the actual investment action, have neither the expertise nor the time to avoid being sucked in no matter how leery they are.
If you have a 401(k) or IRAs administered by someone else somewhere, do you receive reports the size of a phone book that you receive 3 or 4 time a year? Do you read them all? Do you have the capacity to understand them?
Didn't think so.
You're forgetting the institutional investors. Do you know how many large institutions lost billions with the failure of AIG and FNM/FRE?
In addition, your average joe has seen his/her IRA and 401k dip precipitously. Many have pulled back on their investing dollars. Not all are as stupid as you think.