For the Defense - Volume 2, Issue 2 - 2017 - 32
Salman failed to provide clarity
about how the personal benefit test
applies when there is no tangible
exchange and the relationship
between the tipper and tippee is
more attenuated.
that renders the element "a nullity."19 For the tipper's personal benefit to be inferred from the relationship between the tipper and tippee, the Court
held, they must have had "a meaningfully close
personal relationship that generates an exchange
that is objective, consequential, and represents at
least a potential gain of a pecuniary or similarly
valuable nature."20
Relying on Newman, Salman argued to the
Ninth Circuit that the relationship between Maher
and Michael by itself could not demonstrate a personal benefit, and that there was no evidence that
Maher's disclosures to Michael were for any tangible benefit. The Ninth Circuit rejected Salman's
argument as inconsistent with Dirks.21
The Supreme Court granted certiorari. In his
briefs and at oral argument, Salman argued that
prosecutors and lower courts had watered down
the "personal benefit" standard in the years since
Dirks, and that constitutional principles of separation-of-powers and due process compelled a
standard that is both unambiguous and narrowly
drawn. Salman urged that the tipping crime be
limited to those cases where an insider provides a
tip in exchange for pecuniary gain.
The government, on the other hand, argued
for a standard that was even broader than Dirks. It
contended that liability should attach whenever an
insider discloses information for a personal, rather
than a corporate, purpose. Under such a standard,
all "gifts" of inside information satisfy the personal
benefit test, even if the recipient is a complete
stranger rather than a relative or friend.22
In a unanimous and relatively short opinion
issued on December 6, 2016, the Court affirmed
Salman's conviction. It held that Dirks' rule "that a
tipper breaches a fiduciary duty by making a gift
of confidential information to 'a trading relative'"
was "sufficient to resolve the case at hand," and
that pecuniary benefit was not required in those
circumstances.23 "To the extent the Second Circuit
32
For The Defense | Vol. 2, Issue 2
held that the tipper must also receive something
of a 'pecuniary or similarly valuable nature' in
exchange for a gift to family or friends," the Court
held, "we agree with the Ninth Circuit that this
requirement is inconsistent with Dirks."24
The Court emphasized that its opinion was
deliberately "narrow."25 The Court acknowledged
that "in some factual circumstances assessing
liability for gift-giving will be difficult" and "'will
not always be easy for courts,'" and made clear
that it did not intend its decision to resolve other,
more "difficult cases."26
Table of Contents for the Digital Edition of For the Defense - Volume 2, Issue 2 - 2017
For the Defense - Volume 2, Issue 2 - 2017 - 1
For the Defense - Volume 2, Issue 2 - 2017 - 2
For the Defense - Volume 2, Issue 2 - 2017 - 3
For the Defense - Volume 2, Issue 2 - 2017 - 4
For the Defense - Volume 2, Issue 2 - 2017 - 5
For the Defense - Volume 2, Issue 2 - 2017 - 6
For the Defense - Volume 2, Issue 2 - 2017 - 7
For the Defense - Volume 2, Issue 2 - 2017 - 8
For the Defense - Volume 2, Issue 2 - 2017 - 9
For the Defense - Volume 2, Issue 2 - 2017 - 10
For the Defense - Volume 2, Issue 2 - 2017 - 11
For the Defense - Volume 2, Issue 2 - 2017 - 12
For the Defense - Volume 2, Issue 2 - 2017 - 13
For the Defense - Volume 2, Issue 2 - 2017 - 14
For the Defense - Volume 2, Issue 2 - 2017 - 15
For the Defense - Volume 2, Issue 2 - 2017 - 16
For the Defense - Volume 2, Issue 2 - 2017 - 17
For the Defense - Volume 2, Issue 2 - 2017 - 18
For the Defense - Volume 2, Issue 2 - 2017 - 19
For the Defense - Volume 2, Issue 2 - 2017 - 20
For the Defense - Volume 2, Issue 2 - 2017 - 21
For the Defense - Volume 2, Issue 2 - 2017 - 22
For the Defense - Volume 2, Issue 2 - 2017 - 23
For the Defense - Volume 2, Issue 2 - 2017 - 24
For the Defense - Volume 2, Issue 2 - 2017 - 25
For the Defense - Volume 2, Issue 2 - 2017 - 26
For the Defense - Volume 2, Issue 2 - 2017 - 27
For the Defense - Volume 2, Issue 2 - 2017 - 28
For the Defense - Volume 2, Issue 2 - 2017 - 29
For the Defense - Volume 2, Issue 2 - 2017 - 30
For the Defense - Volume 2, Issue 2 - 2017 - 31
For the Defense - Volume 2, Issue 2 - 2017 - 32
For the Defense - Volume 2, Issue 2 - 2017 - 33
For the Defense - Volume 2, Issue 2 - 2017 - 34
For the Defense - Volume 2, Issue 2 - 2017 - 35
For the Defense - Volume 2, Issue 2 - 2017 - 36
For the Defense - Volume 2, Issue 2 - 2017 - 37
For the Defense - Volume 2, Issue 2 - 2017 - 38
For the Defense - Volume 2, Issue 2 - 2017 - 39
For the Defense - Volume 2, Issue 2 - 2017 - 40
For the Defense - Volume 2, Issue 2 - 2017 - 41
For the Defense - Volume 2, Issue 2 - 2017 - 42
For the Defense - Volume 2, Issue 2 - 2017 - 43
For the Defense - Volume 2, Issue 2 - 2017 - 44
For the Defense - Volume 2, Issue 2 - 2017 - 45
For the Defense - Volume 2, Issue 2 - 2017 - 46
For the Defense - Volume 2, Issue 2 - 2017 - 47
For the Defense - Volume 2, Issue 2 - 2017 - 48
For the Defense - Volume 2, Issue 2 - 2017 - 49
For the Defense - Volume 2, Issue 2 - 2017 - 50
For the Defense - Volume 2, Issue 2 - 2017 - 51
For the Defense - Volume 2, Issue 2 - 2017 - 52
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https://www.nxtbook.com/nxtbooks/PACDL/FORTHEDEFENSE_vol3_issue3_2018
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https://www.nxtbook.com/nxtbooks/pacdl/FORTHEDEFENSE_vol2_issue4_2017
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https://www.nxtbook.com/nxtbooks/pacdl/FORTHEDEFENSE_vol2_issue2_2017
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