I believe there are different tiers to some securities regulations, right? I seem to remember some sort of "professional investor" status you can apply for, that lets you participate in certain private offerings. And I believe the different marketplaces (NYSE, NASDAQ, etc) also differ in the requirements, although I guess these would come on top of common regulations required by the SEC.
A fundamental problem with different tiers of regulation is that people tend to misjudge their competence. Look at the list of Madoff victims, or that congressman who got a bunch of his colleagues to buy his Australian healthcare micro-cap. And while it may feel almost like justice when a congressman fails in such a public and spectacular way, for everyone who deserves it, there will be thousands of people fleeced by corrupt "investment advisors" pushing scams onto unsuspecting victims.
It's easy to say it's these people's fault, and "Americans shouldn't be treated like children". But that sort of just-punishment-for-stupidity rhetoric implies, under the most gracious interpretation, that people people are capable of learning, and that such scams would therefore only be a transient phenomenon. History shows pretty well that this is not the case: new stupid people are born every day.
The less charitable interpretation is that there's just nothing wrong with exploiting peoples' stupidity to take their money. In that case, I wonder why this logic doesn't apply to physical capability as well: we don't need police, a real American can defend his property on his own. And if he's too old, or weak, or not organised enough to always have at least as many defenders around him than there are attackers, then he deserves a good beating...
People tend to not enjoy living under such conditions, so they start outsourcing their protection, both physically and financially. It gives them peace of mind, and it's also extremely efficient in terms of economics: "Hey, why don't we get together, hire someone who specialises in understanding investment risk, and tells us if this company's CEO is actually a convicted felon who has already bought the one-way ticket to Bolivia."
...and after a few rounds of professionalizing this concept, you end up with the SEC.
There's also a fundamental misunderstanding of the term "risk" at play in these debates:
There's the usual "risk" of investments that, in a functioning market, should be almost linearly (anti-)correlated with the potential reward. This is the risk that's meant in all those formulas.
The risk of the Wild West is that you're falling for a scammer. This is a risk that behaves rather differently than the other risk.
The first, good, reward-promising risk is what one might call the uncertainty of things you cannot (practically) know without trying: will people enjoy this movie, will these scientists come up with a drug that works. You can make educated guesses, and the market serves to incentives people to guess well, and therefore allocates money to the most worthy causes available. Importantly, regulations try to make all relevant information available to everyone, and the idea is that all that's left to do is having good intuition, and you may be better at that than all the investment banks combined.
The second risk, that of falling for a sweet-buzzwording scammer, is a risk that only exists because you don't know all the relevant information. But that information exists, and others have it. In such a market, you're almost sure to lose your money, because it is possible to eliminate such risk if you have enough money to invest: Others, who have more resources than you, may just send somebody to the company's address and discover that the CEO has a face tattoo of a Swastika and has his grandmother generate random numbers by flipping coins.