United States v. Mulhern
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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