Cadwalader attorneys considered
oral arguments in the Supreme Court case, Salman v.United States. The attorneys anticipate that the
case will "clarify the government's burden in proving
insider trading cases against tippers and tippees." They
noted: "[ever since] the Second Circuit Court of Appeals
December 2014 decision in United States v. Newman, the
government's ability to aggressively pursue insider trading
cases involving tipping has been in doubt." Further,
they stated: "many courts have not followed
Newman closely," including the present case before
the Supreme Court. For that reason, Newman "has
not completely undermined the DOJ and the SEC's ability to
pursue tipping cases," they said.
The Justices appeared to be unmoved by Salman's
argument that insider trading liability must be construed narrowly
because the offense is not defined precisely by statute. Justice
Kagan expressed concern over Salman's request "to change
the rules in a way that threatens [the] integrity [of the
markets]." Justice Kagan's comments do not suggest a
willingness to adopt Salman's urged limitation on insider
It is unclear whether the Supreme Court's ruling will
elaborate on or clarify Dirks' personal gain
requirement, or if the decision will maintain the status quo.
Either way, Cadwalader attorneys concluded
that Newman is unlikely to be a serious
impediment to prosecuting insider trading cases involving
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