⁵Rule 10b-5 is a rule enacted in 1934 by the Securities and Exchange Commission (SEC) that prohibits securities fraud, which includes making false or misleading statements or omitting crucial information related to the purchase or sale of any security. The rule was enacted by the SEC under its authority granted by Section 10 (b) of the Securities Exchange Act of 1934. The rule also covers instances of insider trading, which is when confidential information is used to manipulate the stock market¹.