In this lesson, we’ll learn about Rule 10b-5, the linchpin of federal anti-securities fraud enforcement.

I. Rule 10b-5

Section 10(b) of the Exchange Act establishes a broad prohibition on fraud in connection with interstate securities transactions. Exchange Act Rule 10b-5 makes unlawful any use of the instrumentalities of interstate commerce or the facilities of a national securities exchange in connection with the purchase or sale of any security to do any of the following

employing a...