Self-regulation, in most instances of business or government, is far from effective or consistent, let alone honest. Self-preservation is a powerful thing, and human nature dictates that we’re all going to make a mistake at some point.
When that unfortunate incident happens, the best thing that can happen is to immediately address it and handle it. The longer it goes unaddressed, the more harm it will cause when it finally sees the light of day. Self-regulation, combined with a natural tendency towards self-preservation, is simply an invitation to corrupt practices or processes.