Jag makes a good point. One company's exploitation proves that the loopholes exist. If one hedge fund used them you can bet that others are doing the same thing.
What "loopholes" are you talking about? Did you read the article? Exploiting a loophole is, until the loophole's closed, legal. What Ribotsky was doing was anything but. It was blatant fraud.
And everybody--except, I guess for some of his clients--knew about it. Just go back through the years here at IHub, searching on his name.