The securities laws are very complex, but what they amount to is that you have to disclose risks in the prospectus. I actually downloaded and read parts of the prospectus for the famous Abacus SIV that was at the center of The Big Short. The prospectus clearly states all the risks - this is a Cayman Islands corporation no assets other than very risky mortgages, you will probably not be paid all the interest, you may not get your principal back, etc, etc. Nobody read it.
Every taxpayer should see “The Big Short” and watch it too the end. Very sobering - Oh and the big fin guys are doing the same $hit again.