a friend of both Ferraro and Maio. Maio and Ladavac immediately purchased shares in Xidex stock. On the day that the tender offer was announced—an announcement that caused the price of Xidex shares to increase—Maio and Ladavac sold their Xidex stock and made substantial profits (Maio made $211,000 from the transactions, and Ladavac gained $78,750). The Securities and Exchange Commission (SEC) brought an action against the three individuals, alleging that they had violated, among other laws, SEC Rule 10b-5. Maio and Ladavac claimed that they had done nothing illegal. They argued that they had no fiduciary duty either to Anacomp or to Xidex, and therefore they had no duty to disclose or abstain from trading in the stock of those corporations. Had Maio and Ladavac violated SEC Rule 10b-5? Discuss fully.