The New California Blue-Sky Law

by David Eiteman, Franklin Tom



The article focuses on a new California Corporate Securities Law which came into force on January 2, 1969. The only state blue-sky law of its type in the nation, the new statute is designed specifically to blend California regulatory practice with the many advances in federal securities regulation which have occurred since passage of the Securities Act of 1933. The new law will affect California businessmen of both large and small enterprises by altering and simplifying many of the legal steps required to offer corporate securities to California investors. Primary concern under the old California law was protecting the public against unwise investments in high-risk ventures. A system of paternalistic regulation developed early in this century which required the commissioner of corporations to issue a permit before any corporate securities could be issued or sold. The basic requirement of the new California law is that all issuances of securities within the state must be qualified with the Commissioner of Corporations. However, there are a number of exemptions from this general requirement of qualification.

California Management Review

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