Securities laws generally would have choked small-business capital formation when first enacted but for the fact that broad categories of "exemptions" were recognized that essentially allowed private placements to continue without being burdened by onerous disclosure and registration requirements.

Attempts are afoot to get a comparable carve-out from Sarbanes-Oxley's most burdensome requirements for small-cap public companies but these have stalled to date as the regulatory impulse continues unabated in today's Washington.