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"Blue Sky" Filings - Our Attorneys Understand State Securities Laws

Most investors and business leaders are familiar with the Securities and Exchange Commission (SEC), the national agency that enforces federal securities laws. But the SEC is not the only entity with regulatory power over these transactions. If you intend to offer or sell securities in any state, you need to meet the registration requirements established at the state level, known as "Blue Sky Laws." At Brewer & Pritchard, P.C., we have extensive experience helping businesses in Texas and nationwide remain in compliance with state securities laws.

Why "Blue Sky?"

While the origins of the term "blue sky" are somewhat unclear, it is generally traced back to a 1917 Supreme Court decision. Justice Joseph McKenna, author of the Court's majority opinion, condemned schemes whose basis was "so many feet of 'blue sky;'" that is, committing fraud by selling stock in purely speculative ventures. That decision upheld the constitutionality of securities regulations at the state level. Today, all 50 states each have their own securities act - colloquially known as the "blue sky law."

In particular, the Texas State Securities Board oversees the registration of securities offered or sold in the State of Texas, as well as entities that sell securities or provide investment advice, under the Texas Securities Act. As such, if you intend to conduct securities transactions in Texas, you need to be in compliance with the Texas Securities Act in addition to federal laws.

Trust an experienced, blue sky filing lawyer

Securities laws are complex. And because of the constantly evolving nature of the world of corporate finance, they often change frequently. Too often, we've worked with business owners who found themselves in violation of state or federal law without even realizing it, usually because they failed to seek experienced and competent legal counsel before taking action.

In order to offer or sell a security in Texas, you must first either go through the registration process with the Texas State Securities Board or obtain an exemption spelled out in the Texas Securities Act. Likewise, if you intend to offer or sell a security in a state other than Texas, you need to register or be exempt from registration according to that state's blue sky law. When exemptions are available, you will likely need an attorney's help to properly file for an exemption and meet all necessary conditions.

Make sure you receive the right advice regarding all applicable blue sky laws before you commence a sale or offering of securities. Make sure you contact us. We can help you every step of the way.