Unanimous Salman Decision from U.S. Supreme Court Overrules Newman

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December 8, 2016

On December 6, the U.S. Supreme Court issued its eagerly anticipated ruling in Salman v United States, unanimously affirming the 9th Circuit’s affirmance of Salman’s guilty verdict for insider trading.  The Court affirmed the verdict even though the insider did not receive a tangible personal benefit in return for tipping his brother, who in turn tipped Salman, about material nonpublic information.  In so doing, the Supreme Court also overruled the 2nd Circuit’s holding in Newman, to the extent it had required in all cases that a tipper to a family member or friend must personally receive a pecuniary benefit or its virtual equivalent before he can be found to have breached his fiduciary duty, a predicate to criminal liability for the tipper and any direct or indirect tippees.

In this client alert, RK&O partners Lee Richards, Michael Mann and David Massey outlined the key takeaways from the Salman decision and the issues still left to be determined.

Click here to read the client alert.