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Salman V. US: Will It Change The 'Personal Benefit' Test?

By Nicolas Morgan, Thomas Zaccaro, and Jenifer Doan

This fall, the U.S. Supreme Court will hear argument in Salman v. United States, one of the most closely watched insider trading cases in decades. Salman will address a split between the Second and Ninth Circuits regarding key elements of tipper/tipper liability first articulated by the Supreme Court more than 30 years ago in Dirks v. U.S. Securities and Exchange Commission, 463 U.S. 646 (1983). In particular, the court is expected to resolve the issue of what constitutes a “personal benefit” to a tipper sufficient to satisfy the Dirks standard for insider trading under Section 10(b) of the Securities Exchange Act.