Las Vegas, NV, August 05, 2018 --(PR.com)-- The Reg.A Funding Group announced today that they have published their latest "Reg A Money Show" podcast which explains whether Security Token Offerings (STO) require Blue Sky Law
registration with the Securities and Exchange Commission (SEC).
The focus of this Article is on blue sky laws
. These are the state laws that most directly impact capital formation.
An introduction to blue sky laws
, found on the site's compliance page, is a brief article that explains the role that the states play in securities regulation; the registration of securities transactions; and the registration of brokers, dealers, and agents.
1970), specifically the per-investor limits and the preemption of blue sky laws
. However, the revised CROWDFUND Act appears to appropriately address those concerns, though the House language still provides the best scenario for small businesses wishing to raise capital over the internet.
Since SCDs are usually not considered securities, they fall outside of the registration requirements imposed by each state's blue sky laws
. Further, under the National Securities Markets Improvement Act of 1996, federal law preempts the application of blue sky laws
to certain categories of securities, known as "covered securities." Included in the definition of "covered securities" are certain securities exempt under Section 3 of the 1933 Act.
(39) In addition, aggrieved plaintiffs are increasingly bringing claims for violations of state Blue Sky laws
. (40) The following list of potential claims, while not exhaustive, provides a practitioner with a primer on the strengths and limits of these claims.
The court found "nothing in the language of [section] 517.211 to indicate that the Florida [L]egislature intended to force victims of fraud to aggregate their profits and losses from separate transactions that happened to involve the same defendant and thus reduce their recoveries." (19) The court further reasoned that, "[i]f the methodology espoused by [Shearson] were adopted, it could serve as a license for broker-dealers to defraud their customers with impunity up to the point where losses equaled prior gains." (20) Other courts have reached similar conclusions applying federal securities laws and the Blue Sky Laws
of other states.
(97) Blue Sky laws
were investor protection statutes, designed to protect shareholders from fraud and deception, (98) and required corporations seeking to raise capital through the sale of securities to register with a state securities commissioner.
Also, Thomson West has released Westlaw 50 State Regulatory Surveys, a service that provides surveys of state regulations for researchers across four topics: insurance, blue sky laws
, employment and healthcare.
"But recent developments have raised some doubt as to whether all paper issued by ag co-ops is, in fact, entirely exempt from the 1933 act or the blue sky laws
. The whole area of paper issued by cooperatives has come under closer scrutiny during the past few years." The article goes on to examine the issue in detail, including what is involved in registering with the SEC and state securities commissions.
"You need to be mindful of blue sky laws
," he says, adding that "this can be a hassle if you have investors in different states." Still, "at the seed [funding] level, you may not get much documentation." Adds Bryan Finkel, an investment manager with Advanta Bank Corp.
Some initial concerns regarding the posting of offering statements on Web sites and compliance with state blue sky laws
was alleviated by the adoption of the National Securities Markets Improvements Act (NSMIA) of 1996, which effectively pre-empted many state requirements applicable to offerings of state and local government bonds.
With the foreclosure of many of these federal causes of action, state statutes such as the mini-RICO statutes, blue sky laws
and deceptive trade practices may provide a new focus for litigation.
Part II illustrates how these dynamics will continue to change the boundaries of federal securities regulation in three illustrative areas: (i) state securities regulation, or so-called blue sky laws
; (ii) the scope of the Securities Act of 1933; and (iii) municipal securities regulation.
Thus, prudent RRG organizers will proceed on the basis that the exemptions from the federal securities law registration requirements and state blue sky laws
will not apply to ownership interests in the holding company.