Who are Blue Sky Laws regulated by?

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asked Jan 22, 2022 in Law & Legal by AutarkWoman (1,190 points)
Who are Blue Sky Laws regulated by?

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answered Jan 22, 2022 by MrJoemark (740 points)
The SEC regulates Blue Sky Laws.

However each state also has it's own regulators of Blue Sky Laws as well.

The purpose of Blue Sky Laws is to protect investors against securities fraud.

Blue sky laws are state regulations established as safeguards for investors against securities fraud.

The blue sky laws, which may vary by state, typically require sellers of new issues to register their offerings and provide financial details of the deal and the entities involved.

The reason the blue sky laws are called blue sky laws is because the blue sky law originated from concerns that fraudulent securities offerings were so brazen and commonplace that issuers would sell building lots in the blue sky.

A blue sky law, any of various U.S. state laws  is designed to regulate sales practices associated with securities (e.g., stocks and bonds).

The term "blue sky law" is said to have originated in the early 1900s, gaining widespread use when a Kansas Supreme Court justice declared his desire to protect investors from speculative ventures that had "no more basis than so many feet of 'blue sky.

The first blue sky law was enacted in Kansas in 1911 at the urging of its banking commissioner, Joseph Norman Dolley, and served as a model for similar statutes in other states.

The blue sky laws were created to protect the public from investing in fraudulent companies and to combat abuses in securities markets.

Blue sky is an additional premium paid for goodwill, or the potential to make more money by adding services or products.

When buying a business you should pay for the value of the business and not for “blue sky.”

Kansas in 1911 became the first state to adopt blue sky laws.

From 1911 to 1933, blue sky laws served as the exclusive means by which to regulate securities offers, sales, and distributions in the state.

The federal government entered its involvement with the Securities Act of 1933.

While the SEC directly, and through its oversight of the FINRA and the various Exchanges, is the main enforcer of the nation's securities laws, each individual state has its own securities laws and rules.

These state rules are known as “Blue Sky Laws”.

In the United States, each individual state has its own securities laws and rules.

These state statutes are commonly known as Blue Sky Laws.

Although the specific provisions of these laws vary among states, they all require the registration of securities offerings, and registration of brokers and brokerage firms.

Since Blue Sky filing requirements vary from state to state, the annual amendment requirements vary as well.

While some states may not require an annual amendment, other states may require Blue Sky amendments to be submitted annually.

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