Court Backs Prosecutors Over Family Tips in Insider Trading Cases
December 06 2016 - 11:20AM
Dow Jones News
WASHINGTON—The Supreme Court on Tuesday cemented the ability of
prosecutors to pursue insider trading cases based on tips passed
along among friends and family.
The court, in a unanimous opinion by Justice Samuel Alito,
affirmed the conviction of a Chicago man for trading on inside tips
from relatives.
The ruling rejected arguments by defendant Bassam Salman, who
traded on information originally from his brother-in-law who worked
as an investment banker at Citigroup Inc. He was convicted in 2013
and sentenced to three years in prison.
Mr. Salman had contended that evidence of a family relationship
between the tipper and the tip recipient wasn't enough to support a
conviction.
The high court disagreed, saying an earlier 1983 Supreme Court
decision easily resolved the case against Mr. Salman.
Justice Alito said the earlier high-court precedent "makes clear
that a tipper breaches a fiduciary duty by making a gift of
confidential information to a trading relative, and that rule is
sufficient to resolve the case at hand."
Write to Brent Kendall at brent.kendall@wsj.com and Aruna
Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
December 06, 2016 11:05 ET (16:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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