Blue Sky Laws Legal Meaning and Definition

Here is a simplified definition of the legal term Blue Sky Laws.

Blue Sky Laws (n)

Blue Sky Laws are regulations designed to protect potential investors from deceit or fraud. These laws ensure that businesses cannot raise funds from the public without being truthful about their financial status and capacity to safeguard the invested money. For instance, companies must receive approval from regulatory bodies like the Securities and Exchange Control Board when advertising an issue of shares or stocks to the public.