Blue Sky Laws Claims
There are two concurrent systems of securities regulation in the United States – one on the federal level and one on the state level. “Blue sky law” is a term of art used to describe only state level laws regulating the purchase and sale of securities. Unlike the federal securities and exchange act, Blue Sky laws are all enacted by individual states. Most states securities laws are based off of the Uniform Securities Act, which was created by the National Conference of Commissioners On Uniform State Laws . Blue sky laws are synonymous with the Uniform Securities Act and the two terms are often used interchangeably by securities attorneys and practitioners.
There are two basic components to the Uniform Securities Act. The first component is regulatory and authorizes individual states to regulate the intrastate purchase and sale of securities. The regulatory function of a state’s blue laws is carried out by the state’s securities commissioner. The second core aspect of a blue sky law are the civil liability provision, which is also known as the “anti-fraud” provisions. For our purposes, this is the most important aspect of the Uniform Securities Act because it enables investors to pursue civil remedies for the violation of the Uniform Securities Act. These civil remedies often involve a return of principal, interest and attorneys’ fees. Civil claims under blue sky laws almost always involve concurrent issues of fraud, misrepresentations and/or omissions made in connection with the sale of securities.
Issues involving blue sky laws and the uniform securities act are highly complex. If you have any questions regarding these laws, or their application to your individual situation, please do not hesitate to contact us.
What are blue sky laws?
Blue sky law is a term used to describe laws passed on the state level regulating the purchase and sale of securities.
Where can I find more information about my state’s blue sky laws?
The National Conference of Commissioners on Uniform State Laws maintains an updated list of all the jurisdictions that have adopted the Uniform Securities Act.
What civil remedies are available under the Uniform Securities Act?
Civil remedies under the uniform securities act general include, a return of principal, interest and reasonable attorneys’ fees. Your attorney should look up the law in your jurisdiction to determine the laws that may apply to you.
Can an investor waive blue sky law protections?
No. Most Blue Sky Laws contain what is known as an “anti-wavier” provision, which states that any agreements waiving compliance with the law are void.
Does the Uniform Securities Act allow investors to sue for attorneys’ fees?
Yes, the uniform law does, however, not every state has adopted the uniform act verbatim.