Dec 30 2015: DISTRIBUTED for Conference of January 15, 2016. Ibid. SALMAN v. UNITED STATES. It remains the case that "[d]etermining whether an insider personally benefits from a particular disclosure, a question of fact, will not always be easy for courts." 2 Dirks v. SEC, 463 U. S. 646 (1983) , established the personal-benefit framework in a case brought under the classical theory of insider-trading liability, which applies “when a corporate insider” or his tippee “trades in the securities of [the tipper’s] corporation on the basis of material, nonpublic information.”United States v.O’Hagan, 521 U. S. 642 –652 (1997). In Salmons Case. Salman received lucrative trading tips from an extended family member, who had received the information from Salman's brother-in-law. Stay up-to-date with FindLaw's newsletter for legal professionals. The Government argues that any concerns raised by permitting such an inference are significantly alleviated by other statutory elements prosecutors must satisfy. Respondent United States . Salman points out that many insider-trading cases--including several that Dirks cited--involved insiders who personally profited through the misuse of trading information. 891, as amended, 15 U. S. C. §78j(b) (prohibiting the use, "in connection with the purchase or sale of any security," of "any manipulative or deceptive device or contrivance in contravention of such rules as the [Securities and Exchange Commission] may prescribe"); 17 CFR §240.10b-5 (2016) (forbidding the use, "in connection with the sale or purchase of any security," of "any device, scheme or artifice to defraud," or any "act, practice, or course of business which operates . Sekhar v. United States, 570 U. S. ___ (2013) (Hobbs Act); Skilling v. United States, 561 U. S. 358 (2010) (honest-services mail and wire fraud); Cleveland v. United States, 531 U. S. 12 (2000) (wire fraud); McNally v. United States, 483 U. S. 350 (1987) (mail fraud). 773 F. 3d, at 453-454. At first he relied on Michael's chemistry background to help him grasp scientific concepts relevant to his new job. of Oral Arg. Salman v. United States 580 U.S. _, 137 S. Ct. 420 Facts: Insider trading is a form of securities fraud where both a giver of 792 F. 3d, at 1093. Maher sometimes used code words to communicate corporate information to his brother. After Maher started at Citigroup, he began discussing aspects of his job with Michael. "[2], A jury convicted Bassam Yacoub Salman of securities fraud and U.S. District Judge Edward M. Chen then denied Salman's motion for a new trial. More broadly, Salman urges that defining a gift as a personal benefit renders the insider-trading offense indeterminate and overbroad: indeterminate, because liability may turn on facts such as the closeness of the relationship between tipper and tippee and the tipper's purpose for disclosure; and overbroad, because the Government may avoid having to prove a concrete personal benefit by simply arguing that the tipper meant to give a gift to the tippee. The first of the two articles attached to the indictment is conspicuously headed, "The Hypocrisy of the United States and her Allies." Salman has cited nothing in this Court's precedents that undermines the gift-giving principle this Court announced in Dirks. Although he instantly regretted the tip and called his brother back to implore him not to trade, Maher expected his brother to do so anyway. In such a case, the defendant breaches a duty to, and defrauds, the source of the information, as opposed to the shareholders of his corporation. App. We reject Salman's argument that Dirks's gift-giving standard is unconstitutionally vague as applied to this case. ADVOCATES: 8-10. Send. To the extent that the Second Circuit in Newman held that the tipper must also receive something of a "pecuniary or similarly valuable nature" in exchange for a gift to a trading relative, that rule is inconsistent with Dirks. Id., at ___, ___ (slip op., at 9, 10). Assuming that these cases are relevant to our construction of §10(b) (a proposition the Government forcefully disputes), nothing in them undermines the commonsense point we made in Dirks. Jan 19 2016: Petition GRANTED limited to Question 1 presented by the petition. Maher, the tipper, provided inside information to a close relative, his brother Michael. Id., at 664. [t]he tip and trade resemble trading by the insider himself followed by a gift of the profits to the recipient," 463 U. S., at 664. 36-37, 39. BASSAM YACOUB SALMAN, PETITIONER v. UNITED STATES, on writ of certiorari to the united states court of appeals for the ninth circuit. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. PETITIONER:Bassam Yacoub Salman. 137 S. Ct. 420 (2016). The Government also notes that, to establish a defendant's criminal liability as a tippee, it must prove that the tippee knew that the tipper breached a duty--in other words, that the tippee knew that the tipper disclosed the information for a personal benefit and that the tipper expected trading to ensue. Written and curated by real attorneys at … The Second Circuit also reversed the Newman defendants' convictions because the Government introduced no evidence that the defendants knew the information they traded on came from insiders or that the insiders received a personal benefit in exchange for the tips. Syllabus ; Opinion of the Court (Alito) Petitioner Bassam Yacoub Salman . The Government claims to find support for this reading in Dirks and the precedents on which Dirks relied. Because the Court of Appeals properly applied Dirks, we affirm the judgment below. Start studying Printz v. United States. The Court of Appeals observed that this is a misappropriation case, 792 F. 3d, 1087, 1092, n. 4 (CA9 2015), while the Government represents that both theories apply on the facts of this case, Brief for United States 15, n. 1. Id., at 33-34. Maher "love[d] [his] brother very much," Michael was like "a second father to Maher," and Michael was the best man at Maher's wedding to Salman's sister. And, as Salman conceded below, this evidence is sufficient to sustain his conviction under our reading of Dirks.