Texas Gulf Sulphur Company (TGS) was a corporation engaged in exploring for and mining certain minerals. A particular tract of Canadian land looked very promising as a source of desired minerals, and TGS drilled a test hole on November 8. Because the core sample of the hole contained minerals of amazing quality, TGS began to acquire surrounding tracts of land. Stevens, the president of TGS, instructed all on-site personnel to keep the find a secret. Because subsequent test drillings were performed, the amount of activity surrounding the drilling gave rise to rumors regarding the size and quality of the find.

To counteract these rumors, Stevens authorized a press release denying the validity of the rumors and describing them as excessively optimistic. The release was issued on April 12 of the following year, though drilling continued through April 15. In the meantime, several officers, directors, and employees had purchased or accepted options to purchase additional TGS stock on the basis of the information concerning the drilling. They also recommended similar purchases to outsiders without divulging the inside information to the public. At 10:00 A.M. on April 16, an accurate report on the find was finally released to the American financial press.

The Securities and Exchange Commission brought an action against TGS and several of its officers, directors, and employees to enjoin conduct alleged to violate Section 10(b) of the Securities Act of 1934 and to compel rescission by the individual defendants of securities transactions assertedly conducted in violation of Rule 10b-5. Have any of the defendants violated Section 10(b)? Explain.