On Dec. 6, 2016, the U.S. Supreme Court issued its much-awaited decision in Salman v. United States,1 upholding a “friends and family” insider-trading conviction and effectively overruling the Second Circuit’s decision in United States v. Newman. In October, we issued an alert describing the highlights of the oral argument and the implications of the Supreme Court’s impending ruling.2
Bassam Salman was convicted of insider trading for receiving secondhand stock tips from a family member. Salman’s brother-in-law, Maher Kara, was an investment banker at Citigroup. Maher passed stock tips to his older brother Mounir (“Michael”) Kara, who in turn passed the tips to Salman.
The Supreme Court unanimously upheld Salman’s conviction and rejected Salman’s argument that he should not be held liable because there was no evidence that Maher personally benefited from the tip.
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