New Insider Trading Ruling: 7 Things You Should Consider To Avoid Criminal Prosecution

In its first insider trading ruling in almost 20 years, the U.S. Supreme Court upheld a ruling by the 9^th Circuit Court of Appeals that a person can be held criminally liable for passing inside information to a friend or relative, even if the tipper does not receive a financial benefit from the tip. The Supreme Court's decision will make it easier to prosecute insider trading cases and should serve as a reminder that no one should trade on or pass on to others to trade on, confidential, non-public information about a company. Otherwise, it may result in criminal prosecution.

Insider trading generally involves a person in possession of non-pubic information about a company trading on that information, either making a profit or avoiding a loss. In this case, Maher Kara, an investment banker, passed a tip to his brother, Michael Kara, who passed the tip to his brother-in-law, Bassam Salman, a Chicago grocery wholesaler, who then (with another relative) traded on the