Strict Liability & Securities Law Congress defined security laws to include investment contracts, but "investment contract" is not itself defined in law (Condomimiums as Investment Contracts under the Security Laws, 2011). An Eleventh Circuit court decision indicated "The test for an investment contract is whether the contract is (1) an investment of money (2) in a common enterprise (3) made with expectation of profits to be derived solely from efforts of others" (Condomimiums as Investment Contracts under the Security Laws, 2011). Because law is lacking in adequate definitions, it is completely possible for a business owner to operate a business without fully understanding the laws that govern the individual practices.

The Trust Indenture Act of 1939 applies to debt securities such as bonds, debentures, and notes offered for public sale (The Laws That Govern the Securities Industry). The Securities Acts of 1933 and 1934 govern the disclosure of financial information through registration of securities. The Investment Company Act of 1940 requires disclosure of financial condition and investment policies when stock is initially sold. The Investment Advisers Act of 1940 regulates investment advisors. Sarbanes-Oxley Act of 2002 governs corporate responsibility, financial disclosures, and corporate and accounting fraud. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 govern consumer protection, trading restrictions, credit ratings, regulation of financial products, corporate governance and disclosure, and transparency. In all of these laws, there is little or no mention of the investment contracts...

This makes it very difficult for business owners to make sure they comply with law. The definitions in the laws are not well defined to create the clarity that is needed for business owners to fully understand exactly what the law is indicating.
Strict liability makes a person or company responsible for harm to others regardless of whether they are negligent or not (What is a strict liability cause of action?). It is based on an act plus harm equals liability. The elements to establish strict liability are (1) the defendant did something that was inherently dangerous and unreasonable under the circumstances, (2) the act caused something to happen that was bad, and (3) the plaintiff must show harm from the injury.

Strict liability usually stems from carelessness in thinking or acting, whether it was a defaulted product that caused harm to a consumer or an action that caused financial loss to an investor. In the case of Harry Blinton, the first act of carelessness actually stemmed from not searching out laws that affected the investment contracts on his own from the start. Because of the complexity of laws, it is always advisable to do searches to understand aspects of law instead of relying on professionals who do not always understand the full extent of law. With any business, it is the requirement of the business owner to ensure the business is in fact in conformity with the laws that govern all aspects of the business.

The issue of strict liability claims is justifiable because the carelessness of the…