Blue Sky Laws

Written By
Paul Tracy
Updated November 4, 2020

What are Blue Sky Laws?

Blue sky laws require the registration of brokers, brokerage firms and investment professionals in order to provide transparency of financial offerings and protect investors from investment fraud. Each state has its own blue sky law.

How Do Blue Sky Laws Work?

In an attempt to make money quickly at the expense of naïve or uninformed investors, companies offer enticing investment opportunities with little legitimate backing. For this reason, each U.S. state has blue sky laws in place to thwart such attempts and protect the public’s financial interest. Though such laws vary by state, blue sky laws require that the details of new securities issued be registered with state authorities for examination in order to assure the public of their legitimacy.

Why Do Blue Sky Laws Matter?

Blue sky laws help to prevent an individual’s loss from an investing scam by forcing companies to provide detailed information about potential stock or bond issues.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Blue Sky Laws.
Be the first to ask a question

If you have a question about Blue Sky Laws, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Blue Sky Laws, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Blue Sky Laws

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms