The Sky is Not Falling, Todd Newman: The Ninth Circuit Endorses a Measured Reading of Newman's Definition of Personal Benefit for Insider Trading Liability in United States v. Salman

Abstract

On July 6, 2015, the U.S. Court of Appeals for the Ninth Circuit, in United States v. Salman, declined to adopt the novel definition of the personal-benefit element for insider trading, as articulated by the U.S. Court of Appeals for the Second Circuit in United States v. Newman in December 2014. In so doing, the court’s decision presented the first significant resistance to the longevity of the Newman court’s apparent holding that the personal-benefit element requires proof of a pecuniary exchange in all instances. This Comment argues that the court in Salman correctly declined to extend the Newman personal-benefit definition beyond its facts, that the two cases are reconcilable, and together illustrate the difference between “friends” and family for the purposes of establishing tipper-tippee, insider-trading liability.