The justices, in an 8-0 decision, ruled against Bassam Salman, who was appealing a 2013 conviction stemming from federal charges that he made nearly $1.2 million trading on non-public information that came from his brother-in-law at Citigroup Inc.

Salman had argued that prosecutors in insider trading cases must prove that an alleged source of corporate secrets like the brother-in-law received a tangible benefit like cash in exchange for any tips, something his brother-in-law did not receive. By rejecting the 2nd Circuit’s “pecuniary gain” requirement and making clear that conduct like Salman’s falls squarely within the insider-trading laws, the court took an important step in its first ruling in an insider-trading case in two decades. Dirks, the court explained in an opinion by Justice Samuel Alito, “makes clear that a tipper breaches a fiduciary duty by making a gift of confidential information to ‘a trading relative.’” This is so, the court continued, because “giving a gift of trading information is the same thing as trading by the tipper followed by a gift of the proceeds.” Here, the court reasoned, Maher Kara breached his duty of trust and confidence to Citigroup when he gave information to his brother, Michael, knowing that Michael would trade on it; Salman then inherited that duty and breached it when he traded on the confidential information. Prosecutors said Maher Kara, a Citigroup investment banker and Salman's brother-in-law, provided tips about deals involving Citi clients to Kara's brother, who in turn tipped Salman, who made over $1.5 million that he split with another relative. A federal jury in San Francisco in 2013 found Salman guilty of conspiracy and securities fraud charges, and he was sentenced to three years in prison. Prosecutors had suffered a blow two years ago when the federal appeals court in Manhattan overturned the conviction of hedge fund managers Todd Newman and Anthony Chiasson after finding they were too far removed from inside information to be prosecuted. That resentencing hearing was ordered by the Florida Supreme Court in October.The state is objecting to the Florida court's interpretation of the U.S. Supreme Court's landmark decision in January in the Hurst case, according to the document filed Friday in Escambia County.The U.S. Supreme Court's decision in Hurst's case found that Florida's system of allowing judges, instead of juries, to find the facts necessary to impose the death penalty was an unconstitutional violation of the Sixth Amendment right to trial by jury.
The U.S. Supreme Court upholds an appeals court decision in an insider trading case, Salman v. U.S., holding that there is no requirement that a tipper receive any pecuniary consideration for a breach of faith in order to predicate the prosecution of the tippee.