Litigation & Investigations

Supreme Court Confirms Framework for “Tippees” under Insider Trading Laws

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On December 6, 2016, the Supreme Court issued a unanimous decision in Salman v. United States, holding that a tipper’s gift of confidential, inside information to a trading relative constituted a sufficient personal benefit to support an insider trading conviction. In Salman, the Supreme Court rejected any interpretation of the Second Circuit’s decision in United States v. Newman that would require proof that an insider received money, property, or something of tangible value in exchange for divulging confidential information, in order to establish criminal or civil liability. The Salman holding was narrowly tailored but it still a clear signal to those who trade on information gleaned from others of the potential dangers of trading on confidential, inside information.

See the full discussion of the Salman case here.