445 U.S. 222 (1980)
Petitioner printer was indicted and convicted of violating § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78j, and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5. While working for a financial printer, petitioner handled announcements of corporate takeover bids. Without disclosing his knowledge, petitioner purchased the targeted companies stock, selling the shares immediately after the takeover attempts were made public.
Reversing petitioner's conviction, the Court held that petitioner had not violated the duty to disclose material information where no relationship of trust or confidence existed between petitioner and the shareholders. While noting that silence in connection with the purchase or sale of securities could have been fraud under § 10(b), the Court held that petitioner had not violated § 10(b) where he was under no affirmative duty to disclose the information before trading. Because petitioner was not an agent or fiduciary of the sellers, the Court found that he had no duty to the sellers.
Petitioner's convictions were reversed where petitioner's failure to disclose non-public market information prior to trading was not fraudulent because petitioner did not have a relationship with the sellers for imposing an affirmative duty to disclose such information.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials