The only sense in which punishment of any kind is reasonable is when it works to disincentivise harmful behavior. If higher risks for shareholders convince them to take a more active role in ensuring that their investment isn't causing harm to the rest of us, then they're at least as reasonable than any other sort of punishment.
If the cheating had gone unnoticed, the shareholders would've been rewarded, so they should bear some risk whether or not they sold after the crime was committed.
As it is, we've got incentives set up to encourage investment in bad behavior so long as you get out before your people get caught.
As for the government abusing the justice system... What rules would create justice is sort of orthogonal to the circumstances under which the rules are broken.
If the cheating had gone unnoticed, the shareholders would've been rewarded, so they should bear some risk whether or not they sold after the crime was committed.
As it is, we've got incentives set up to encourage investment in bad behavior so long as you get out before your people get caught.
As for the government abusing the justice system... What rules would create justice is sort of orthogonal to the circumstances under which the rules are broken.