Whether or not you're an investor, it's important to grasp the significance of what's happened with the Facebook initial public offering (IPO).

In the few days since its IPO, Facebook's stock price has fallen almost 20 percent amidst news that underwriters led by Morgan Stanley and perhaps Facebook itself shared negative assessments of the company only with big, institutional investors -- not with the broader investing public.

It's going to take some time to suss out exactly what happened with the Facebook IPO, but step back and consider the broader implications. They are staggering.

The most hyped IPO in history has turned into a debacle marred by insider dealing. It's no exaggeration to say the whole world was watching -- and still the decks were stacked against average investors.

This is remarkable commentary on the untrustworthiness of Wall Street. If anyone had any doubts, it shows the utter folly in relying on Wall Street to police itself.

What's that you say? Oh yes, that's right, Congress did just pass and President Obama eagerly signed legislation -- the misnamed JOBS Act -- to reduce regulatory oversight of Wall Street and the launch of IPOs. It aims to make it easier for new companies to launch IPOs without providing detailed information about their operations to investors. Whoops.

At the time the bill was under consideration, critics (including Public Citizen) suggested the JOBS Act was basically pro-fraud legislation. "The legislation is premised on the dangerous and discredited notion that the way to create jobs is to weaken regulatory protections," wrote a public interest coalition headed by the Consumer Federation of America and Americans for Financial Reform. The legislation would "roll back regulations that are essential to protecting investors from fraud and abuse, promoting the transparency on which well-functioning markets depend, and ensuring the fair and efficient allocation of capital."

The JOBS Act was an assault on common sense at the time it was passed -- has the Obama administration and Congress really forgotten that the Wall Street crash that threw us into the Great Recession was caused in significant part by regulatory failures? -- but it looks even worse this week than it did at time of passage.

It's not too much to take from the Facebook debacle -- along with other smoldering scandals, like the JPMorgan Chase multi-billion dollar derivatives loss and the accounting mess at Groupon -- broader lessons than just that the JOBS Act was a horrendous mistake.

First, we need tougher not weaker controls on Wall Street activity. That means, at minimum, that we need aggressive and rapid implementation of the Dodd-Frank Wall Street reform legislation, including the Volcker Rule that aims to limit the speculative betting of big banks.

Second, and more generally, Big Business cannot be trusted to police itself. We need strong health, safety, environmental, financial and other regulatory protections, with well-resourced regulatory cops on the beat and citizens empowered to enforce the rules that regulators fail to apply.