Decades of “regulatory creep” and onerous disclosure requirements have discouraged companies from going public, say leaders of the Securities and Exchange Commission. To revitalize American markets, they plan to pare back those demands, especially for smaller firms. “We need a reset,” Chairman Paul Atkins recently declared.

Although this narrative has a certain appeal, the SEC risks misdiagnosing the problem it’s trying to solve — and hence overlooking more pressing concerns.

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