In the few days since the Supreme Court handed down its decision in Salman v. United States, many commentators have said, in effect, that criminal prosecutions for insider trading are alive and well. Alive, yes; well, maybe not.
At the risk of quoting myself, almost exactly two years ago I posted an item on this blog entitled “There ought to be a law”. My belief at the time was that insider trading law is so byzantine that it’s impossible to know where legally permissible behavior becomes legally impermissible behavior. For better or worse (worse, IMHO), nothing has changed all that much. In the Salman decision, SCOTUS says that a prosecutor need not prove that a tipper received something of a “pecuniary or similarly valuable nature” to convict the tipper of illegal insider trading. So far, so good. However, as many commentators have pointed out, Salman leaves any number of other issues wide open.