Keeping $23 Trillion in Private Assets Dark Is Asking for Trouble

The US has a baffling two-tier system of rules for its companies. Public companies are buried in regulation while little is demanded of comparably sized private businesses. The Securities and Exchange Commission, under the new leadership of Chair Paul Atkins, is set to relax disclosure requirements for public companies. It should take the opportunity to apply the same standard to all big US companies, even those staying private.

There used to be a genuine distinction between public and private businesses. For a long time, public companies were far bigger and more valuable, requiring vast amounts of capital to operate. Public markets were pretty much the only place to get it. That’s no longer true: There’s nearly $23 trillion invested in private assets in the US alone. Unlike in public markets, though, many of those investments were made with scant or questionable financial disclosure.