Rational investment decisions require accurate information regarding the operations and performance of issuers. As the U.S. Securities and Exchange Commission (“SEC”) has recently noted: “Accurate and reliable financial reporting lies at the heart of our disclosure-based system for securities regulation, and is critical to the integrity of the U.S. securities markets. Investors need accurate and reliable financial information to make informed investment decisions. Investor confidence in the reliability of corporate financial information is fundamental to the liquidity and vibrancy of our markets.” Issuers have strong motives to signal to investors that the business information they disclose is correct and complete – so as to build solid reputations and avoid discounts that investors might apply to their stock prices as compensation for undisclosed risk or misrepresented results. A similar argument applies to “gatekeeping” reputational intermediaries, such as auditing firms and investment banks that lend their reputations to their clients in various ways. However, dishonest issuers and gatekeepers can take advantage of a generally honest market (that does not contain a substantial fraud risk discount), and the return on fraud for a given member of a firm might exceed such individual's pro rata share of the firm's overall reputational capital, making crime literally pay; therefore, regulation must be introduced to supplement market controls and mandate full and accurate disclosure.