True or False: In blue sky laws, federal law preempts state law.

In the context of blue sky laws, the correct response is that federal law does not preempt state law; instead, both can coexist. Blue sky laws are state regulations designed to protect investors from securities fraud, and they can impose requirements that are more stringent than federal laws. While the federal government has established a framework for regulating securities through laws like the Securities Act of 1933 and the Securities Exchange Act of 1934, states retain the authority to regulate the sale and offering of securities within their borders, as long as they do not conflict with federal securities regulations.

The principle of "federalism" allows states to enact and enforce their own laws, including those related to securities, which can include registration, disclosure requirements, and anti-fraud provisions. Therefore, the statement that federal law preempts state law concerning blue sky laws is false because both levels of law can operate simultaneously, with certain scenarios allowing state laws to be more restrictive than federal regulations.