Facebook deal shows need for hard look at security laws

The Goldman Sachs investment in Facebook is drawing inquiry from the SEC. One criticism is that the deal doesn’t meet the spirit of the rules that divides private and public companies, but what it really shows is Facebook looking for the best way to grow amidst current regulations. 
This is smart business.  Facebook wants to be able to continue to invest, innovate, and grow.  Going public in the current regulatory environment might undermine those goals because of the new regulatory burdens that would accompany expanding the pool of shareholders.
The SEC has an important role in policing capital markets for fraud, but regulatory intervention in these cases lead to more intervention to correct the inevitable failures or dissatisfaction with previous interventions.
America needs to get smart about its overly burdensome securities laws before more damage is done. A certain amount of transparency is essential for good corporate governance.  But the path we are now on is instead wrapping companies and capital markets in layers of red tape that suffocate investment and innovation.