The U.S. Supreme Court on Tuesday ruled that a secondhand tippee who trades on confidential inside corporate information first passed between brothers can be convicted of insider trading even though the original tipper received no money or property for the tips.
The Supreme Court upheld the conviction of Bassam Salman in a unanimous opinion (PDF) by Justice Samuel A. Alito Jr. Salman was accused of making $1.5 million by trading on tips from an investment banker now married to Salman’s sister. The investment banker (Salman’s brother-in-law) had given the information to the investment banker’s brother, who traded on the information and also passed it along to Salman.
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