Rule: According to “Securities of Exchange Act” section 10b rule 10b-5 any activity that uses a certain tool or a scheme in an attempt to defraud or omitting some information that would help other traders in their decision to buy or sell is a crime.

Facts

• Mr. Bleakney was an employee of NMG,
• He directed the sales of the company in America and Europe
• When Bleakney was officer in the company, he sold more than seventy-five thousand shares
• Mr. Bleakney resigned from the company after which he bought twenty thousand shares
• The corporation did nothing concerning the issue
• A shareholder in the company, Mr. Morales, filed a lawsuit against Bleakney and the company in a bid to recover the share. However, he died, and the executor became the claimant

Conclusion

The law prohibits the use of certain knowledge or any tool in one’s grasp as an advantage in getting a service or in this case a share. Since Mr. Bleakney worked with NMG representing it in a huge capacity, such as overlooking sales in three continents, he had full knowledge of the workings of the company. Considering his conduct, one may be forced to say that Mr. Bleakneys deed of resignation was a planned move so that he could buy the shares more so because he bought the shares a month later after resignation. Moreover, since Mr. Bleakney worked in the company, he had colleagues that would have given him the information on the availability and the circumstances of the shares in question. Therefore, Mr. Bleakney is guilty of breaking the securities act by using the knowledge he had of the shares in making the decision to buy the twenty thousand shares.