Archive | insider trading

Tuesday, December 6th, 2016

Supreme Court Upholds “Friends and Family” Insider-Trading Conviction

From SCOTUSblog:

“Bassam Salman, a Chicago grocery wholesaler, received stock tips from a friend, who had in turn received inside information from Salman’s brother-in-law, an investment banker at Citigroup. Salman made hundreds of thousands of dollars from the tips, but he was also charged with insider trading and sentenced to three years in prison. Today the Supreme Court upheld Salman’s conviction, rejecting his argument that he could not be held liable because his brother-in-law had not received any financial benefits in exchange for the inside information that he disclosed. The unanimous ruling – which came just over two months after the oral argument – was a big victory for the federal government, which had warned the justices that a ruling for Salman would lead to even more disclosures of confidential information by corporate insiders.”…

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Saturday, September 8th, 2012

The Tipping Point

United States v. Contorinis, No. 11-3-cr (2d Cir. August 17, 2012) (Winter, Hall, Chin, CJJ)

In this appeal from an insider trading conviction, the defendant unsuccessfully challenged the jury instructions in which the district court defined “material, nonpublic information.”

Contorinis was a portfolio manager at a hedge fund, who befriended an investment banker at UBS. From late 2005 to January of 2006, the banker was providing information to several of his friends, Contorinis included, about the potential sale of the Alberstons grocery chain.  Contorinis bought and sold large blocks of Albertsons stock for his fund based on this information. The Albertsons deal had lots of false starts, but when it was finally publicly announced as a go, Contorinis sold all of the fund’s Albertsons stock making a net profit of $3 million.

Contorinis’ defense at trial was that, although he and the banker spoke often, the banker never gave him …


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