SCOTUS Review: Salman v. United States

A huge amount of information flows from publicly traded companies to outsiders-both market professionals and others-who might later trade in the securities of those companies. Some of that information is broadly disclosed in press releases or other statements to the public at large, and so raises no concern under the insider trading laws. The U.S. Supreme Court's recent decision in Salman v. United States addresses the other side of the coin-the legal limitations on trading in information that has not been shared with the world at large. Contrary to some public perceptions, the securities laws recognize that it is legitimate in many circumstances for a person who receives such information to trade in it. But in other circumstances, to trade in privately disclosed information can expose the recipient to civil or criminal liability for insider trading. The dividing line is critical and yet, as the Supreme Court's decisions in this area openly state, the line drawn by the courts is not always easy to apply. This course, taught by Sidley Austin Partner Kwaku A. Akowuah, focuses on a principal piece of that dividing line-the so-called "personal benefit" test-as recently illuminated by the Salman decision.

Learning Objectives:

1. Understand the historical roots of the "personal benefit" test, as articulated in the Supreme Court's decision in Dirks v. SEC (1983)
2. Assess how that test was applied in cases between Dirks and Salman, including in the arguably conflicting decisions that prompted the Supreme Court to review the Salman case
3. Identify the issues that Salman resolved about the "personal benefit test"-and those that appear to have been left open for future cases