alt Hacker NewsAs long as the S-1 is honest, the SEC is doing its job.
A real risk is the market cap, including insider holdings, being large enough to force the stock into major indices. That makes the stock a must-buy for index funds. That in turn props up the stock regardless of how crappy the financial position and how small the float. That was controversial when Space-X went public. It went into several major indices despite not really being that big in terms of revenue.
It felt a bit dishonest in that they pushed out their S-1 without Q3, and then it turns out Q3 revenue growth is decelerating (which they added in the recent addendum).
That being said, I don't think the government should be involved unless it's to unilaterally ban these "public" companies where shareholders do not have equal voting power with 'founders'.
If people want to invest, let them invest.