Instead of patent medicine pitched by traveling salesmen, we have essential oils pitched by MLM recruits. People know not to buy magical cure-all patent medicine from an old-times salesman with a handlebar mustache, but they don’t know to avoid miracle essential oils pitched by their cousin who just joined an MLM. Same story, different minor details, larger scale than ever.
I think people tend to forget how rampant these frauds can be only because we have relatively decent enforcement and limits around them now. Remove the guard rails and they will proliferate like never before.
The lesser talked about issue with public investing is they the genuine entrepreneurs don’t actually need to raise money from general public. There is already more investment money out there than genuine deals available to take it up. Most of the investment opportunities that make their way to the general public have already been reviewed by and declined by many skilled, professional investors. Anything left for the public is inherently biased toward being a very bad investment.