Blue sky laws

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In the U.S., blue sky laws are the states' securities laws and rules designed to prevent investment fraud. The origin of the term is unclear, but U.S. Supreme Court Justice McKenna in a 1917 opinion said the name indicates "speculative schemes which have no more basis than so many feet of 'blue sky'". [1]

The laws vary from state to state, but they require registration of securities offerings and of brokers and brokerage firms. Each state has a regulatory agency which administers the law.