House Oversight — Estate records
HOUSE_OVERSIGHT_019856
SG IMA News Mar2017
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Edited by Yelena Maltser • ymaltser@sglawyers.com MARCH 2017 SUPREME COURT REJECTS NEWMAN REQUIREMENT OF “PECUNIARY OR SIMILARLY VALUABLE” PERSONAL BENEFIT FOR INSIDER TRADING LIABILITY FOR TIPPING FAMILY AND FRIENDS BY SAMUEL J. LIEBERMAN The U.S. Supreme Court gave the government a major victory in Salman v. U.S., 1 which lowers the standard for proving insider trading involving tipping family or friends, and will embolden the government to bring similar cases. Salman holds that a gift of inside information to a family or friend is sufficient to prove insider trading tipping liability—even if the tipper did not receive a valuable quid pro quo in exchange for the tip. This significantly narrows U.S. v. Newman, in which Client Alert Status of the New DOL Fiduciary Rule BY DANIEL G. VIOLA Reprinted with permission of Hedgeweek The Department of Labor’s (the “DOL”) new fiduciary ruling (the “Rule”) has created strife in the securities industry and has the potential to significantly impact how financial advisers and brokers will manage retirement accounts in the future. Currently, brokers, financial advisers, and other finance professionals do not legally have to act Salman will almost certainly embolden the SEC and federal prosecutors to bring more insider trading cases, because it is much easier for the government to prove a “gift” to a “friend” than to prove a “pecuniary” or similar quid pro quo. the Second Circuit (a lower appellate court) held that a tipper must receive “at least a potential gain of a pecuniary or similarly valuable nature,” (continued on page 2) in a client’s best interest, with few exceptions, such as those who are registered as investment advisers with the U.S. Securities and Exchange Commission or in individual states. Those who are not registered, like brokers, just have to prove that the investment is suitable, not necessarily the best option, for their client—no matter that that fund might be more expensive and provide (continued on page 2 […]