Blue Sky Laws
regulations by ations by which various States of the Union have attempted to protect their citizens against investment in fraudulent or worthless securities. Kansas was the pioneer in the movement, and many other States quickly followed her example. California, in 1917, required that every person or company selling securities within the State, whether they were originally issued in the State or elsewhere, must secure a certificate authorizing said person or company to act as a broker. All advertising matter relating to the sale of securities must undergo a searching scrutiny by the State Commission. In Minnesota, in the same year, a new law created a State Securities Commission, consisting of the public examiner, the attorney-general and the State superin- BLUE TIT tendent of banking, and required all dealers not only to be licensed, but to advise the commission in advance of all projected offerings. Any offer considered unfair or fraudulent might be suspended, pending investigation, and later, if the suspicions were justified, prohibited altogether. A law passed in Illinois, to become effective Jan. 1, 1918, differed from the Minnesota statute in that the Illinois law prohibited the sale of any securities in the State until the dealer had been licensed, while in Minnesota the dealer was only required to give information that might later result in prohibition of sales if the securities should not bear scrutiny. It is evident that under the latter provision a certain amount of business might be done before the prohibition was finally decreed. Pennsylvania, Ohio, Michigan, Iowa, and South Dakota have passed laws patterned largely on similar plans. In a notable decision, under date of Jan. 22, 1917, the United States Supreme Court upheld the position of the States in a case involving Ohio, Michigan, and South Dakota laws.