The U.S. Supreme Court yesterday ruled unanimously that Bassam Salman, who was convicted of insider trading in 2013, violated the law by trading on confidential information obtained through his brother-in-law even though he gained no tangible financial benefit, MorningConsult.com reported. The case, Salman v. United States, presented the central question of how to define a “personal benefit” garnered from insider information. Justices affirmed a lower court decision that ruled in favor of Salman’s conviction. Salman received insider information from his friend through marriage, who in turn had garnered information his own brother, an employee at Citigroup Inc. Salman then traded on it through another connection. The Court’s ruling strengthens the government’s hand in insider trading cases by affirming that a user of financial tips breaches fiduciary duty when it comes as inside information from a relative, whether or not the person giving the information receives a tangible financial benefit. Yesterday’s opinion undercuts a narrower 2014 ruling saying that the person who provides the tips must receive something of value in exchange for inside information given to family or friends.
