Securities Exchange Act of 1934, §§ 78u-2(e) and 78u-3(e).

78u-2(e): Authority to enter order requiring accounting and disgorgement: "In any proceeding in which the Commission or the appropriate regulatory agency may impose a penalty under this section, the Commission or the appropriate regulatory agency may enter an order requiring accounting and disgorgement, including reasonable interest. The Commission is authorized to adopt rules, regulations, and orders concerning payments to investors, rates of interest, periods of accrual, and such other matters as it deems appropriate to implement this subsection."

78u-3(e) is similar.

http://en.wikipedia.org/wiki/Disgorgement_(law)

The (presumed) intent is to remove the incentive for others to do this, which a fixed or capped fine would not accomplish (as you observed).

The SEC doesn't avoid people who are "juiced in" to the government. It prosecutes cases it can win. Bankers spend a lot of time figuring out where the line is and staying on the right side of it. To the extent they do anything wrong, prosecuting them involves getting a jury to understand reserve ratios and risk models and other things they won't understand. But insider trading is easy to understand. He had this insider information, and did this trade that saved him $750k. I can explain that to grandma. Its easy. Which is why bankers don't get caught doing it, but less plugged in people do.