Key takeaways

• On December 6, 2016, the Supreme Court of the United States issued its much-anticipated decision in Salman v. United States, unanimously upholding Salman’s conviction for insider trading based on material nonpublic information he received from his brother-in-law.
• Adhering closely to the Dirks formulation of the personal benefit standard, the Court held that a gift of non-public information to a trading relative or friend was sufficient to trigger insider trading liability, but declined to provide further guidance to lower courts or legal practitioners as to the contours of the personal benefit standard as applied in more difficult cases, guaranteeing that the debate around the personal benefit standard will continue.
• The decision underscores the need for clients to obtain sophisticated counsel when facing government investigations and enforcement actions on suspected insider trading activity.