Long time viewer of forum. 

By way of background I am a member of a regulatory group that was investigating SLI for a number of years. Here are my observations:

1. There was no conspiracy. The company was very poorly run by management that did not care for its shareholder base. Very little attention was paid to investor relations, which only exacerabted the situation.  However, there was nothing criminal that occurred. There is a fine distinction between being a bad business person and a criminal, and management did not cross the line. Management may have been slimy but they were not criminals.
2. Regulators cannot protect people from themselves. We understood that a certain individual held "chats" with large groups of people during which all sorts of information was passed about the company. This information was passed though personal networks and ultimately shares were purchased on the secondary market. Regulators can only act where the company is selling shares directly - they cannot prevent people from acting on their own behalf.
3. Greed is what got people in trouble here. Colleagues of mine spoke with a large number of individuals that put inordinate funds into the company. Sound financial advice would have prevented this, but people got greedy. Diversification exists because it helps spread risk. A junior Canadian mining company is at the very top of the risk spectrum.