Set a thief to catch a thief-the way to plug India's regulatory loopholes

The appointment of UK Sinha as SEBI Chairman got me thinking as to why we do not have more regulators who are from the private sector. Unlike Mr Sinha who was heading UTI AMC(a private sector body), the previous SEBI Chairmen were generally career IAS officers. The argument against allowing private talent into such senior regulatory positions generally is

1. The revolving door between public and private sector may reduce the independence/objectivity of the regulators. Restrictions on private sector appointments are not really enforced..and then one cannot debar 'consulting' and other assignments
2. Demotivates the career cadre regulatory officers. 
3. The in house staff may have seen a wider range of issues/scams than anyone working in industry

While the above arguments are valid, past evidence may swing the pendulum towards industry professionals. For example, the first SEC Chairman Joe Kennedy was a noted market manipulator but the security laws he wrote have stood the test of time.

Industry bodies are unlikely to propose changes which adversely impact them yet it is the industry professional who knows the loopholes and how they are played. The question is-who will relinquish a plum industry post to enter regulation? To that, a post retirement post could be created.