On November 4, 2013, the US Department of Justice announced that it had reached a settlement with SAC Capital Advisors to the tune of $1.2 billion for insider trading violations. With $15 billion in assets under management, the hedge fund has been a power player on Wall Street for decades. However, it will no longer be able to manage money for outside investors now that it has essentially admitted to criminal activity. While authorities were able to indict the firm, they failed to produce any lasting charges on Steven A. Cohen himself, the fund’s sole owner and founder. Cohen still maintains a net worth of over $9 billion and is free to utilize his firm to invest his own money. While the fine is undoubtedly a large amount, it appears to be insufficient to rattle someone like Mr. Cohen.

Since the financial markets crashed in 2008, the entire banking industry has been characterized as the enemy of the people. In the public’s perception, Wall Street’s culture advocates duping hardworking citizens, taking their savings and gambling away millions like a drunken night in Vegas. Firms like Lehman Brothers and Bear Stearns have served as symbols of the industry’s arrogance—institutions once thought to be too big to fail ultimately succumbing to their own greed. The government, too, was blamed for pushing a culture of deregulation and blindly leaving Wall Street to its own devices, armed with an arsenal of extremely easy, cheap credit. Knowing very well that the public wanted blood, President Obama successfully ran on a campaign platform promising to implement harsh regulations and strict penalties on any misconduct stemming from Wall Street.

And to an extent, the President has delivered on his promise. In addition to settling with SAC Capital Advisors in November, the US Department of Justice reached an agreement with JPMorgan Chase CEO Jamie Dimon to pay a whopping $13 billion fine for misleading investors and selling toxic mortgage-backed securities prior to the crisis of 2008. The settlement was the largest the American government has ever enforced on any single company. It has been hailed by many as a landmark achievement for proper regulation, achieving an amount seemingly large enough to deter firms from engaging in the type of reckless financial imprudence that led to the crisis in the first place.

To make matters worse for Mr. Dimon, his firm announced last month that it had set aside $23 billion in legal fees to deal with not only the aforementioned settlement but also a multibillion-dollar trading loss (now known as the London Whale), accusations of manipulating energy markets in California, and improper practices regarding the hiring of political figures’ children in China. Given that in 2012 JPMorgan Chase secured a net income of $21 billion, it is not hard to see that these penalties and fees are not negligible, even for the largest bank in the United States. It has also armed critics who have long called for Mr. Dimon’s dismissal from his current position for failing to uphold his fiduciary responsibility to his shareholders as the head a of a publicly traded company.

While these fines imposed on Wall Street’s behemoths are meaningful, they appear to be little more than a good start. SAC Capital Advisors has strong relationships with nearly all of the other banks on Wall Street and still has over $9 billion in Mr. Cohen’s personal holdings to manage. Moreover, the seemingly mammoth impact of the fines on J.P. Morgan is negligible. According to The Huffington Post, the firm is well on its way to erasing its losses in record time after a surge in stock price, and is on pace to completely recoup the $13 billion by the first week of December. While the costs have led to the firm’s first loss in nearly a decade, profits for the year are still nearing $13 billion. The bank’s reputation seems to be largely untouched by the entire ordeal, and experts still revere Mr. Dimon as one of the best executives in the world.

Nevertheless, the fine does set a precedent. Since 2010, banks such as JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, and Bank of America have paid fines totaling almost $90 billion in order to settle lawsuits, deal with criminal investigations, and dismiss civil cases. However, many of these fines were previously criticized by many for being little more than superficial slaps on the wrist in an attempt to appease the bloodlust of the public. With this new fine, it is clear that the government is now adopting a strategy that seeks to directly affect the bottom line, a marked shift from when just nine months ago. US Attorney General Eric Holder let it slip that these banks were so big that they were “difficult to prosecute.”

It is important to note that these fines are coming at a time when the banks under prosecution are financially robust. The banking industry as a whole has posted two straight quarters of strong earnings, and the Federal Reserve’s quantitative easing policy has turbocharged asset prices in capital markets for a particularly conducive investment environment. Consequently, critics remain unsatisfied and will continue to demand heavier fines and even criminal charges for those responsible. In their eyes, higher fines logically represent a higher likelihood of preventing repeat behavior.

Banks are striking back, characterizing these fines as part of a witch-hunt designed to serve as some sort of catharsis for those who want to see Wall Street burn. Stephen Cutler, General Counsel for J.P. Morgan and former Chief of Enforcement for the Securities and Exchange Commission, called the government’s prosecution as based more “in art than science” and warned that “at a certain point people become immune to numbers.” Mr. Cutler has also made it clear that he intends to raise the issue of misconduct among federal regulators in the future. Media outlets are already picking up on the narrative; the New York Post’s headline for the J.P. Morgan fine was “Uncle Scam: US Robs Bank of $13B.”

This sort of back-and-forth between Wall Street and federal prosecutors is sure to continue. As fines escalate and investigations deepen, it is important that a middle ground is reached to ensure fairness and maximize effectiveness. In other words, it would be catastrophic if valuable government resources were misused to punish firms simply because of the public’s long-standing bloodlust. At the same time, the government would be remiss to fail to seize this golden opportunity to foster a much-needed culture of strict but fair regulation of the financial sector.