What this has to do with the parent comment? I'm asking these because I'm not sure I follow the reasoning. Your concern is that the SEC has very strict reporting standards and regulations. These are intended to provide a fair field between all investors (accredited and non-accredited) in order for the market to function in a more efficient way. In exchange for this increased cost of regulation upfront, the transaction between investors on the company's shares have a much lower friction (and transaction costs).
Private companies have lower regulation because the assumption is that the investors willing to buy shares are open to assume higher transaction costs in terms of due diligence. Obviously, reporting the false could open the company to lawsuits, but that's also part of the potential cost for the investors.
The choice between being a public company and a private one, in the end, is a function also of this trade-off. If I understand your reasoning, you fear that the SEC forcing himself into the private market could increase the regulatory cost of all startup. Am I right?
If that is correct, my answer would be that the SEC is not imposing the full regulation but just a minimum level of accurate reporting on behalf of the investors. This is because there's an assumption that a well behaved private market is essential to make the economy more active (imagine if this level of lying was accepted, how many investors would be willing to invest?). On the other side, I see the risk of a slippery slope and having the SEC power to grow to large and kill the startup ecosystems. I don't have a clear answer for that.