Emerson served as the chief financial officer for Reliant Electric Co (Reliant), a distributor of electricity. Reliant was in the final stages of planning a takeover of Wilder Gasworks, Inc (Gasworks), a natural gas distributor serving the same area. Emerson went on a weekend fishing trip with his uncle, Wallace. Emerson mentioned to Wallace that he had been putting in a lot of extra hours at the office planning a takeover of Wilder Gasworks. When he returned from the fishing trip, Wallace purchased $20,000 worth of Reliant stock. Three weeks later, Reliant made a tender offer to Gasworks stockholders and purchased 57 percent of Gasworks stock. Over the next two weeks, the price of Reliant stock rose 72 percent before leveling out. Wallace then sold his Reliant stock for a gross profit of $14,400.

Did Emerson violate Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5? Why or why not?