Which term refers to regulations aimed at protecting investors in securities?

Study for the LEGL 2700 Hackleman 3 Exam with comprehensive questions, each accompanied by detailed explanations and hints. Ace your exam preparation today!

The term that refers to regulations aimed at protecting investors in securities is known as blue sky laws. These laws are designed to prevent fraud in the sale of securities and to protect investors from misleading and deceptive practices. They require issuers of securities to provide detailed information about the potential risks and financial health of the investment before it can be sold to the public.

Blue sky laws vary from state to state in the U.S. but generally include requirements for the registration of securities and the disclosure of pertinent information. This regulatory framework is essential for ensuring transparency and maintaining investor confidence in the financial markets.

While other laws such as insider trading laws focus on preventing unlawful profits from non-public information, and securities disclosure laws mandate that companies disclose important financial information to investors, blue sky laws specifically target the protection of investors from fraud in the trading of securities. Corporate governance laws, on the other hand, deal more with the internal structures and practices of companies rather than directly addressing investor protection in the securities market.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy