There are many, many cases where investors are misled by companies -- this falls under the (very broad) heading of securities fraud and it's easy to find documented cases of it. It's not a question of doing their homework.

There is literally no way to have the broad base of investment in markets by members of the public that we see today if investors incur personal liability. It was and remains one of cornerstones of any commercial society.

They said VC, not all investors.

Let's say the investor part doesn't apply to public companies, to make it simple.