Salman v. United States
U.S. Supreme Court · decided December 6, 2016 · Supreme Court Database (Spaeth)
- Decided
- December 6, 2016
- Term
- October Term 2016
- Vote
- 8–0
- Majority author
- Justice Alito
- Issue area
- Criminal Procedure
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice ALITO delivered the opinion of the Court. Section 10(b) of the Securities Exchange Act of 1934 and the Securities and Exchange Commission's Rule 10b-5 prohibit undisclosed trading on inside corporate information by individuals who are under a duty of trust and confidence that prohibits them from secretly using such information for their personal advantage. 48 Stat. 891, as amended, 15 U.S.C. § 78j(b) (prohibiting the use, "in connection with the purchase or sale of any security," of "any manipulative or deceptive device or contrivance in contravention of such rules as the [Securities and Exchange Commission] may prescribe"); 17 C.F.R. § 240.10b-5 (2016) (forbidding the use, "in connection with the sale or purchase of any security," of "any device, scheme or artifice to defraud," or any "act, practice, or course of business which operates ... as a fraud or deceit"); see United States v. O'Hagan, 521 U.S. 642, 650-652, 117 S.Ct. 2199, 138 L.Ed.2d 724 (1997). Individuals under this duty may face criminal and civil liability for trading on inside information (unless they make appropriate disclosures ahead of time). These persons also may not tip inside information to others for trading. The tippee acquires the tipper's duty to disclose or abstain from trading if the tippee knows the information was disclosed in breach of the tipper's duty, and the tippee may commit…
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