1. The costs of attaining and maintaining reporting status is beyond the abilities of most startup companies ( typical cost $1.2M-$2.5M annual). I don't have to tell you the political and economic ramifications of forcing such companies to meet those onerous requirements.
2. Reporting companies commit fraud also. It might be a little more difficult, but it happens with mind numbing regularity. Maddoff was a religious filer...for example.
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