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blue sky law definition - finance
A state law that is designed to protect the public against securities fraud. Kansas was the first state to enact a securities registration law, in 1911. When announcing the legislation’s passage, lawmakers said, “The State was the hunting ground of promoters of fraudulent enterprises...so barefaced...that it was stated they would sell building lots in the blue sky.” Since then, state securities laws have been referred to as blue sky laws.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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