>We have plenty of cases where people have in fact been allowed to fool investors without repercussions. Most famously was the recent collapse of we work. There

>We have plenty of cases where people have in fact been allowed to fool investors without repercussions. Most famously was the recent collapse of we work. There is in general quite a bit of leeway in the private markets to get creative about how you market your financial products. WeWork is a strange case because it relied on creating a market for office space, or else taking market share away from other modes of using office space. You can't look at it on the surface and say it's a terrible business model. That means, any claim against them would need to be quantitative in nature. Also, this deception is forward-looking: you can only claim it was wrong after some time has passed. If they falsified their tenancy numbers (past observables) then that would be more damning. >I don't think it makes sense for a public entity to audit things that the public can't buy. Private financial institutions are (or at least should be) competent to audit their own investments. Private investors should audit their own investments, but auditing is not going to succeed when records and research are deliberately falsified. There is no way to put the blame on investors for having been fooled by deliberate deception. >The general public are not competent to audit their own investments, and even if they were it would be extremely inefficient, so we should probably have some government entity for that. The general public generally entrusts its investment funds to people who are supposed to do the due diligence required. This due diligence is undermined by deception. As for the government getting involved, I agree it might need to be involved if the public can directly buy something (although there are some negative outcomes that come with it, such as regulatory capture and suppression of new stuff). The need for oversight applies even more when public money is used to fund research.