Why stop there? You might as well do away with the SEC altogether. Why even make companies report earnings? When companies shutter their doors because they go BK, the market will adjust the stock price accordingly. There's no need for shareholders to know that the business is starting to swirl around the toilet bowl. They'll know soon enough when the company's been completely flushed down.
So do not buy stock in such a company. Only invest in companies that are certified by a reputable oversight company to consistently disclose all the info you as an investor would like to know. No need for the SEC and criminal prosecution. If the corporation you invest in violates its disclosure agreements to its investors the investors can sue in civil court.