Blue Sky Laws


DEFINITION of 'Blue Sky Laws'

State regulations designed to protect investors against securities fraud by requiring sellers of new issues to register their offerings and provide financial details. This allows investors to base their judgments on trustworthy data.


The term is said to have originated in the early 1900s when a Supreme Court justice declared his desire to protect investors from speculative ventures that had "as much value as a patch of blue sky."

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  1. How did the stock market operate prior to the Securities and Exchange Commission?

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