Shapiro Arato Files Opening Brief In Supreme Court Insider Trading Case

On May 6, 2016, Shapiro Arato filed its opening brief in the United States Supreme Court on behalf of Bassam Salman. Mr. Salman’s case is the first insider trading case that the Supreme Court has agreed to hear in over two decades and raises the question of what “personal benefit” to a corporate insider is sufficient to make an outsider’s trading on nonpublic information criminal. Although there is no statute that expressly proscribes insider trading or “tipping,” the Supreme Court has previously held that a tippee is prohibited from trading in certain circumstances, but only if the insider had disclosed the information for a “personal benefit.” Our brief argues that the Supreme Court’s precedents compel understanding “personal benefit” to mean “pecuniary gain,” and that no other reading would satisfy the constitutional safeguards of due process and separation of powers and provide a clear standard for market participants in the otherwise nebulous, judge-made area of insider trading law. Notably, the United States Court of Appeals for the Second Circuit previously embraced a “pecuniary gain” standard in United States v. Newman, 773 F.3d 438 (2014), another insider trading case in which Shapiro Arato successfully obtained the reversal of our client’s conviction. Mr. Salman’s case is Salman v. United States, No. 15-628.

Alexandra Shapiro and Daniel O’Neill co-authored the brief, together with co-counsel John Cline. A copy of the brief is available here. More information about Shapiro Arato’s representation in Newman can be found here, here, here and here.