There's a strong financial incentive for the market to engage in fraudulent activities against investors. And the smaller the investor, the greater then incentive.
Public companies have regulations that help prevent such fraud by requiring things such as audits by third party accounting firms, and regulating how these audits may be performed. Such regulations came about specifically as the result of fraud committed by the owners and directors of companies.
Private markets don't have these regulations because the assumption is that past financial success is indicative of financial sophistication. It doesn't prevent fraud, but at least it helps reduce the likelihood of success.
If you start making private markets open to everyone, then there's no reason to differentiate between public and private markets anymore. Companies will go back to all being "private" because there are fewer regulations, then there will be another Enron, and a subsequent shift towards regulation to prevent another such scandal.
Public companies have regulations that help prevent such fraud by requiring things such as audits by third party accounting firms, and regulating how these audits may be performed. Such regulations came about specifically as the result of fraud committed by the owners and directors of companies.
Private markets don't have these regulations because the assumption is that past financial success is indicative of financial sophistication. It doesn't prevent fraud, but at least it helps reduce the likelihood of success.
If you start making private markets open to everyone, then there's no reason to differentiate between public and private markets anymore. Companies will go back to all being "private" because there are fewer regulations, then there will be another Enron, and a subsequent shift towards regulation to prevent another such scandal.