The U.S. Securities and Exchange Commission ("SEC") is not the only regulator keeping tabs on securities. Almost every state (and territory) has an agency or division dedicated to enforcing that state's securities laws, commonly referred to as "blue sky laws." That colorful term is attributed to a United States Supreme Court decision which explained that state securities laws were designed to protect investors from "speculative schemes which have no more basis than so many feet of blue sky." This article discusses the effects of state securities laws and regulations in the context of a nonpublic offering and the most common exemptions from state securities registration requirements.
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