Dex’s was employed by the First Merchant Bank

Dex’s was employed by the First Merchant Bank in its International Financial Institutions Department from 1997 until 2003, when Dex’s position was eliminated because of an internal reorganization. Dex’s, using a forged memo to the bank’s security department, caused his magnetic identification (ID) card—which he had received as an employee to allow him to enter the bank building—to remain activated after his employment was terminated. Dex used his ID card to enter the building at night to obtain confidential financial information from the bank’s Specialized Finance Department regarding extraordinary business transactions, such as tender offers. During 2004 and 2005, Dexmade substantial profits through securities trading based on this information. Eventually, Dex’s activities were investigated by the Securities and Exchange Commission (SEC), and Dex was charged with violating Section 10(b) and SEC Rule 10b-5 by misappropriating and trading on inside information in violation of his fiduciary duties to his former employer. Dex argued that the SEC had wrongfully applied the misappropriation theory to his activities, because as a former employee, he no longer had a fiduciary duty to the bank. Explain whether Dex is liable under SEC Rule 10b-5, and defend your conclusions.