ABSTRACT
The federal securities laws are conventionally understood as a disclosure regime: they compel issuers to provide information to the market and back that mandate with strict liability under provisions such as Sections 11 and 12(a)(2) of the Securities Act. Yet this account is incomplete. This article reconceptualizes Securities Act liability through the lens of express warranty law. It makes two critical observations. First, certain issuer disclosures – registration statements, prospectuses, and analogous offering materials – constitute express warranties under contract law principles. Second, the Securities Act’s liability provisions function as a parallel express warranty regime, mirroring warranty law’s virtually strict liability. Seen in this light, the Act was not a sui generis New Deal innovation but part of a broader legal convergence: across both goods and securities, the law evolved to assure reliability in impersonal, mass-market transactions where negotiated terms are impractical. Ironically, the Securities Act’s liability provisions predominate precisely in the public markets where warranty liability would be most difficult to avoid, because investors buy without individualized contracts in which warranties can be disclaimed. Recasting the statute in this way reveals a previously unappreciated function: not to create new liability, but to entrench a market structure in which issuer disclosures operate as inescapable, enforceable promises that define the modern securities market.
Strauss, Emily, Disclosures As Warranties (August 5, 2025).
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