The Supreme Court ruled unanimously on Tuesday that sharing corporate secrets with friends or relatives is illegal regardless of whether something is received in return.
The ruling which sided with the government came just weeks after the high court refused to hear an earlier case in the matter, Fox News reported.
The ruling in the case of Salman v. United States maintained the conviction of Bassam Yacoub Salman, who was charged after making investments based on classified information he had received from Mounir Kara, a member of his extended family.
Maher Kara, Mounir’s brother, originally passed along the information, which ended up in Salman’s possession, said The New York Times.
“Giving a gift of trading information is the same thing as trading by the tipper followed by a gift of the proceeds,” said Justice Samuel Alito, per USA Today.
“To help a close family member is like helping yourself,” said Justice Stephen Breyer.
“Maher would have breached his duty had he personally traded on the information here himself then given the proceeds as a gift to his brother,” said Alito. “It is obvious that Maher would personally benefit in that situation. But Maher effectively achieved the same result by disclosing the information to Michael, and allowing him to trade on it.”
U.S. Attorney Preet Bharara, federal prosecutor in New York City, was pleased with the ruling.
“The court stood up for common sense and affirmed what we have been arguing from the outset – that the law absolutely prohibits insiders from advantaging their friends and relatives at the expense of the trading public,” he said, per the Times. “Today’s decision is a victory for fair markets and those who believe that the system should not be rigged.”
Bassam was prosecuted under a 1983 rule that calls for a conviction for “both corporate insiders and the people they tip off,” USA Today noted.
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