Actually, in this specific case, some of the practices of Wall Street were previously criminal. For example, up until 2004 there were laws that limited bank leverage to iirc 12:1 (or was it 14:1?).

Hank Paulson lobbied for that limit to be removed, unsuccessfully in 2000, then successfully in 2004. That banks and financial entities were levered up to 30:1, 40:1, even 60:1 on toxic securities when the crisis occurred grossly exacerbated it.

So essentially, 'gambling recklessly with credit' was indeed, for a long time, illegal. It was only Wall Street's increasing influence in Washington that got it legalized.