The Supreme Court’s highly anticipated decision in Salman v. United States1 restated what most commentators saw as the pre-existing law of tipper/tippee liability in Dirks v. SEC.2 However, the court broke new ground in its discussion of the vagueness doctrine: the principle that criminal laws must provide clear notice of the conduct they prohibit. For the first time, the court explicitly defended judicially fashioned insider trading doctrine against the common charge that it is too vague and fails to provide a clear and predictable standard for securities professionals, much less the average person.
Below, after describing the vagueness arguments made in Salman, we explain the Supreme Court’s grounds for rejecting these arguments and suggest potential limitations to the court’s vagueness analysis.
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