United States Court of Appeals for the Second Circuit
938 F.2d 364 (1991)
On the morning of October 17, 1985, John Mulhern (defendant) purchased 75,000 shares of Gulf & Western Industries, Inc. (G & W) on the open market. Mulhern made this purchase after several meetings with prominent investment advisers, as well as the chairman of G & W. These advisers sold their stock in G & W immediately after Mulhern’s purchase, as the purchase caused the stock price to rise. However, slow trading for the rest of the day led to a drop in the price of G & W stock, causing Mulhern to lose $64,406. Following this transaction, the United States (plaintiff) brought charges against Mulhern for allegedly conspiring with investment advisers and the chairman of G & W in manipulating G & W’s stock price, in violation of Rule 10b-5. The district court ruled against Mulhern. Mulhern then appealed to the Second Circuit Court of Appeals.
Rule of Law
Holding and Reasoning (McLaughlin, J.)
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