Blue sky laws

Blue sky laws require companies that sell stock, mutual funds, and other financial products to register new issues with the appropriate public agency.

They must also provide financial details of each offering in writing so that investors have the information they need to make informed buy and sell decisions.

These are state rather than federal laws, and owe their origin - at least in legend - to a frustrated judge who equated the value of a worthless stock offering to a patch of blue sky.