• U.S. Supreme Court Grants Certiorari In Connection With Insider Trading Case That Would Resolve Circuit Split Over Tipper Liability
  • January 21, 2016
  • Law Firm: Sutherland Asbill Brennan LLP - Washington Office
  • Earlier this week, the U.S. Supreme Court agreed to hear Salman v. United States, a case that would resolve a split among federal appeals courts over the issue of the nature of the “personal benefit” that must accrue to an insider to establish insider trading under Dirks v. SEC, a previous U.S. Supreme Court case that established tipper liability. The U.S. Supreme Court’s decision to hear the Salman case follows its decision in the fall of 2015 to deny a request for certiorari from federal prosecutors regarding United States v. Newman, which presented a similar issue.

    In the Salman case, the U.S. Supreme Court will decide whether the personal benefit to the insider that is necessary to establish insider trading under the Dirks case requires proof of “an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature,” as the Second Circuit held in the Newman case, or if it is enough that the insider and the tippee shared a close family relationship, as the Ninth Circuit held when it considered the Salman case at the appellate level.