blue sky law
Noun: A blue sky law is a state-level law in the United States designed to regulate the offering and sale of securities (such as stocks and bonds) to protect the public from fraud. The name suggests the laws aim to prevent the sale of securities in ventures with no more substance than a patch of blue sky.
This term is used in legal, financial, and regulatory contexts to describe a specific category of consumer protection legislation at the state level. - The company had to ensure its stock offering complied with the state's blue sky law before proceeding. - Investors are protected by federal regulations and blue sky laws enacted by individual states.
- "To blue-sky" (verb, informal): To evaluate or approve something (like a security or a project proposal) against the requirements of blue sky laws or, more broadly, to assess its legitimacy and prospects. This usage is derived from the noun.
- The legal team will blue-sky the new investment product before the launch.
- Blue-sky (adjective): Pertaining to or governed by blue sky laws.
- The broker was knowledgeable about blue-sky compliance issues.
- Securities regulation (noun phrase): The broader field of laws and rules governing financial securities, which includes both federal laws (like those from the SEC) and state blue sky laws.
- State securities law
- Securities fraud prevention statute (descriptive synonym)
The term "blue sky law" is a fixed legal term with the specific meaning defined above. It should not be confused with the general adjective phrase "blue-sky thinking," which refers to creative, imaginative ideas that are not limited by current thinking or practicalities.
- a state law regulating the sale of securities in an attempt to control the sale of securities in fraudulent enterprises