Salman v. United States
Supreme Court
137 S. Ct. 420 (2016)
Relevant factsFree
Investment banker Maher Kara gave confidential inside information to his brother Michael out of familial affection, knowing Michael would trade on it; Michael, in turn, passed the information to his friend Bassam Salman (defendant), who knew it came from Maher and made over $1.5 million trading on it. Salman was convicted of securities fraud, the Ninth Circuit affirmed, and the Supreme Court granted certiorari.
IssueFree
Whether a tippee is liable for securities fraud if the tipper breaches a fiduciary duty by making a gift of confidential information to a trading relative or friend.