Aruna Viswanatha and Brent Kendall reported on the front page of Wednesday’s Wall Street Journal that, “The Supreme Court handed the government a significant win Tuesday in its pursuit of insider trading, ruling prosecutors in such cases don’t always have to show that something valuable changed hands to prove a crime was committed.
“The unanimous opinion restores some of the power the government lost in a 2014 federal court case. That two-year-old decision had cast doubt on just what constituted insider trading, an often-blurry concept, and forced law-enforcement officials to drop a number of high-profile cases including several against associates of hedge-fund billionaire Steven A. Cohen.”
The Journal writers explained that, “Tuesday’s decision—the first time the high court has touched insider trading in nearly two decades—doesn’t fully restore the scope that the government has lost in recent years to pursue insider trading. The court also sidestepped some of the murkiest issues involving insider trading, including how to treat tips between acquaintances.
“But the ruling gives prosecutors more ammunition to file charges even in cases where they can’t show that the tipster received something of value for passing the information.”
And Adam Liptak reported on the front page of the business section in Wednesday’s New York Times that, “The case, Salman v. United States, concerned trading by Bassam Salman based on information from his future brother-in-law, then a member of Citigroup’s health care investment banking group. Prosecutors claimed that the brother-in-law, Maher Kara, passed information to his brother, Mounir Kara, known as Michael, who then passed the information to Mr. Salman.
“The question was whether prosecutors had to prove that Maher Kara disclosed the information in exchange for a personal benefit.
“The answer was easy, Justice Alito wrote.
“‘Maher would have breached his duty had he personally traded on the information here himself then given the proceeds as a gift to his brother,’ Justice Alito wrote. ‘It is obvious that Maher would personally benefit in that situation. But Maher effectively achieved the same result by disclosing the information to Michael, and allowing him to trade on it.'”
