On December 6, 2016, the
United States Supreme Court affirmed an
insider trading conviction in a case where the "insider"
obtained no direct pecuniary benefit from the disclosure.
Justice Samuel Alito, writing for a unanimous court, held that a
recipient of insider information may still be criminally liable
where the insider initially gave the information to a trading
relative or friend and thereby received a "personal
benefit." The court heard oral arguments in
October.
Salman v. United States concerned the
prosecution of Bassam Salman, a recipient of insider tips from
Michael Kara, his brother in law, who in turn received insider
information from his brother, Maher Kara. Salman knew that
Michael, who also traded on the information, was getting tips from
Maher, a Citigroup banker working on various health care
deals. Maher, the "tipper," never received any
financial or other concrete benefit in the exchange, but testified
that he suspected Michael was
