Respectfully, that's a nonsense point of view. The investors want to get as much of their investment back as possible, or, if they've given up on that, they at least don't want to be seen as having invested in criminals.

If they have concluded that their was some kind of fraud involved then having the government investigate and expose the facts is a lot easier and cheaper for them. They will then be free to use those facts to recover money.

They're the owners of the company; they're already entitled to their share of whatever's left.

Institutional investors are a lot more worried about the (additional) reputational damage, from having invested with criminals, than they are about recovering fractions of fractions of fractions of pennies on the dollar by raiding Elizabeth Holmes' personal bank account.

Nah, no way. If anything the SEC spends too much time chasing down small time crooks scamming grandpa.

That's the point they only go after people scamming grandma unless some influential person pushes them to do otherwise.