In our Dec. 5 editorial, we discussed Salman v. United States, an insider-trading appeal that was argued before the U.S. Supreme Court on Oct. 5. The issue was whether traded-on tips of confidential information by one brother to another violated SEC rule 10b-5, though the tipper received no payment from the tippee.
We commented that, “Time will tell how the Supreme Court comes out on this issue,” but we would not have predicted that the time would come one day later; that the next day, the court would unanimously hold that the brotherly sharing of inside information violated criminal law. In a succinct opinion by Justice Alito, the court concluded that “Salman’s jury was properly instructed that a personal benefit includes ‘the benefit one would obtain from simply making a gift of confidential information to a trading relative.’”
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