One of the most important components of popular capitalism is freedom of information. Private investors need to have open access to financial information, otherwise they won't be able to make wise use of their money and will end up getting fleeced by the so-called professionals. Government regulation of industry leads to inefficiency, but truthfulness in financial markets must be enforced by legal authority simply due to the fact that private individuals cannot accumulate the information they would need in order for market forces to weed out the deceptive investment firms.
The Republicans are often accused of being too close to business, but this article describes how the Bush SEC has come down on 10 of Wall Street's largest firms, and even fined some executives personally for their deceptive and fraudulent actions.
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