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blue-sky laws

   Also found in: Dictionary/thesaurus, Legal, Hutchinson 0.01 sec.
Blue-sky laws
State laws covering the issue and trading of securities.

Blue Sky Laws
Laws requiring research and transparency to ensure that a new issue of a security complies with applicable laws in the state in which they are issued. It especially refers to laws protecting investors from securities fraud. The term became popular when U.S. Supreme Court Justice Joseph McKenna wrote in Hall vs. Geiger-Jones Company (1917) that he wished to protect investors from securities with "no more basis than so many feet of 'blue sky.'" See also: Due Diligence.

blue-sky laws

A popular name for state securities laws intended to protect investors and aid them in making informed buying decisions rather than taking the word of a smooth-talking salesperson who “promises the sky.”



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Blue-sky laws regulate the offerings and sales of securities within a certain state to protect investors against fraud.
The registration statement is intended, if it is declared effective, to ensure that the issuance of shares under these plans to Ligand's employees, consultants, directors or other eligible individuals are made in compliance with federal law and may be freely resold, upon compliance with any state blue-sky laws or company-imposed trading restrictions that apply.
However, it is recommended that brokers check with the blue-sky laws in their particular state.
 
 
 
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