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165 U. Pa. L. Rev. Online 1 (2016-2017)

handle is hein.journals/pennumbra165 and id is 1 raw text is: ESSAY REFRAMING UNITED STATES v. SALMAN ZACHARY J. GUBLERt 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,1 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. Salman involves an investment banker, Maher Kara, who tipped off his brother, Michael, about upcoming transactions involving the bank's clients.2 In addition to trading on that information himself, Michael passed it along to the Karas' future brother-in-law, Salman, who executed nearly identical trades.3 The question on appeal to the Ninth Circuit was whether the brothers' close-knit relationship was alone sufficient to support the inference that Maher shared the information with Michael in exchange for a personal benefit.4 The answer to that question seemed to be no-at least if the Ninth Circuit were to rely on a recently decided Second Circuit case, United States t Professor, Arizona State University Sandra Day O'Connor College of Law. 1 792 F.3d to87 (9th Cir. 2015), cert. granted, 136 S. Ct. 899 (2016) (mem.). 2 Id. at to88-89. 3 Id. 4 Id. at to90. (1)

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