United States v. Mulheren
United States Court of Appeals for the Second Circuit
938 F.2d 364 (1991)
After meeting with prominent investment advisers and the chairman of Gulf & Western Industries (G&W), John Mulheren (defendant) purchased 75,000 shares of G&W on the open market; the advisers then sold their own G&W shares immediately after Mulheren's purchase drove the price up, but slow trading later that day caused the price to fall again, leaving Mulheren with a $64,406 loss on the transaction. The government charged Mulheren with conspiring with the advisers and G&W's chairman to manipulate the stock price in violation of Rule 10b-5, and the district court ruled against him.
Whether the manipulation of securities prices occurs when the purpose of a transaction is solely to affect the price of a security.