You have documented court testimony of a market participant (Goldman) claiming they have the ability to manipulate the market. This should be a slam dunk if we had regulators with anything remotely resembling balls.
Let's imagine that I go to the police complaining that a bunch of my tools, including a hammer, was stolen from my truck. Should I be prosecuted for murder? Is this a "slam dunk", and should the police and prosecutors have their manhood questioned for not going after me for murder? Even though, to the best of everyone's knowledge, no murder has been committed by anyone, least of all me?
Pretty much anyone, including you, has the ability to manipulate the market. It's not hard; in fact it's so trivial that you can do it by accident. That doesn't mean we should throw you in jail just in case you decide to do it in the future.
Goldman put a lot of time and energy into making an example out of this guy. He blatantly "did it" - they had recorded phone conversations of him talking to his new boss and uploading code immediately after. I know the details because we received almost weekly reports on the case via the corporate intranet (in the "news" section). Goldman wants their people scared so nobody else tries this.
I always found it a bit odd because the court sentenced this guy to 8 years. Ummm... ok. But why is Fabrice Tourre still walking around? Justice indeed.