United States v. Salman, No. 14-10204 (9th Cir. 2015)Annotate this Case
Defendant appealed his conviction for conspiracy and insider trading, arguing that the evidence was insufficient to sustain his conviction under United States v. Newman. The court determined that defendant has not waived his argument where the failure to raise the issue properly did not prejudice the Government because both parties have had a full opportunity to brief the issue and address it at oral argument. The court found that the evidence was more than sufficient for a rational jury to find both that the inside information was disclosed in breach of a fiduciary duty, and that defendant knew of that breach at the time he traded on it. The court declined to follow Newman, which defendant reads to hold that evidence of a friendship or familial relationship between tipper and tippee, standing alone, is insufficient to demonstrate that the tipper received a benefit. Accordingly, the court affirmed the judgment.
Court Description: Criminal Law. The panel affirmed a conviction by jury trial for conspiracy and securities fraud arising from an insider-trader scheme. The panel held that the defendant did not waive a sufficiency of the evidence issue raised only in a supplemental brief because both parties had an opportunity to brief the issue and to address it at oral argument. The panel held that the evidence was sufficient to support the conviction because it showed that an insider breached his fiduciary duty by disclosing information to a trading relative, and that the defendant knew of that breach at the time he traded on it. The panel declined to hold that under the Second Circuit’s opinion in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), the government also was required to prove that the insider disclosed the information for a personal benefit.