1. Does the personal benefit to the insider that is necessary to establish insider trading under Dirks v. SEC, 463 U.S. 646 (1983), require proof of "an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature," as the Second Circuit held in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), cert. denied, No. 15-137 (U.S. Oct. 5, 2015), or is it enough that the insider and the tippee shared a close family relationship, as the Ninth Circuit held in this case?
2. Can failure to investigate suspicious circumstances, without more, constitute the "deliberate actions" to avoid knowledge that this Court found necessary to establish willful blindness in Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011)?
DECISIONDecided December 6, 2016 HOLDING
The Ninth Circuit properly applied Dirks to affirm Salman’s conviction. Under Dirks, the jury could infer that the tipper here personally benefited from making a gift of confidential information to a trading relative.
ALITO, J., delivered the opinion for a unanimous Court.
ORAL ARGUMENTArgued October 5, 2016
CERTIORARI STAGEGranted January 19, 2016
United States Court of Appeals for the Ninth Circuit
Decided July 6, 2015
|December 6, 2016||Supreme Court Sides With Prosecutors in Insider Trading Case||Adam Liptak||The New York Times|