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Tipping The Scales Against Insider Trading: Adopting A Presumption Of Personal Benefit To Clarify Dirks, Ronald J. Colombo

Hofstra Law Review

In this article, Professor Colombo anticipates the Supreme Court’s recent 8-0 decision in Salman v. United States (2016).The appropriate standard for assessing tipper-tippee liability for insider trading has been unsettled ever since the Court last spoke on the issue, in Dirks v. SEC (1983). This is due to Dirks’s unclear language, which appeared to articulate an unworkable standard predicated upon “personal benefit.” The lower courts have struggled to define this concept of “personal benefit.”The Ninth Circuit adopted an approach in which the personal benefit was essentially presumed, so long as the tips in question were made to a friend or …