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blue sky laws definition
laws intended to protect the public from purchasing stock in fraudulent companies
that lack substance, such as those selling swamp land, non-existent gold strikes
and dry oil wells, or who have no assets besides a post office box. Blue sky laws
require that corporations advertising and selling shares to the public must get
approval from the state corporations commissioner and/or the Securities and Exchange
Commission after providing details on financing and management. The term comes from
the intent to prevent the existence of corporations that have nothing behind them
but "blue sky. "
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