Business 8th Edition by Marianne Jennings

Exercise 4

Vincent Chiarella was employed as a printer in a financial printing firm that handled the printing for takeover bids. Although the firm names were left out of the financial materials and inserted at the last moment, Mr. Chiarella was able to deduce who was being taken over and by whom from other information in the reports being printed. Using this information, Mr. Chiarella was able to dabble in the stock market over a 14-month period for a net gain of $30,000. After an SEC investigation, he signed a consent decree that required him to return all of his profits to the sellers he purchased from during that 14-month period. He was then indicted for violation of 10(b) of the 1934 act and the SEC's Rule 10b-5. Did Mr. Chiarella violate 10b-5? [ Chiarella v United States , 445 U.S. 222 (1980)]