Reframing United States v. Salman

165 U. Pa. L. Rev. Online 1

9 Pages Posted: 13 Sep 2016

See all articles by Zachary James Gubler

Zachary James Gubler

Arizona State University (ASU) - Sandra Day O'Connor College of Law

Date Written: September 13, 2016

Abstract

If a corporate insider breaches a confidence to his employer by passing along nonpublic information to a family member, who then uses it to profit in the stock market, can it be inferred that the insider must have received some sort of personal benefit in exchange for that tip? That’s the issue in United States v. Salman, a once-in-a-decade insider trading case that the Supreme Court will hear in its 2016 Term. If the issue sounds narrow, that’s because it is. In part, however, this narrowness is the result of how the case has been framed thus far. All parties involved, including the Court, seem to assume that one must prove a personal benefit in order to establish liability when insider trading involves a tip. That was true once. But the Court’s own insider-trading jurisprudence has moved beyond the logic of that requirement. The Court would do well to acknowledge this fact, thereby bringing much needed clarity to a notoriously messy and unpredictable area of law.

Keywords: insider trading, securities regulation, securities fraud, Rule 10b-5

JEL Classification: K22

Suggested Citation

Gubler, Zachary James, Reframing United States v. Salman (September 13, 2016). 165 U. Pa. L. Rev. Online 1 , Available at SSRN: https://ssrn.com/abstract=2838057

Zachary James Gubler (Contact Author)

Arizona State University (ASU) - Sandra Day O'Connor College of Law ( email )

Box 877906
Tempe, AZ 85287-7906
United States

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