Salman v. United States Page 2

Salman v. United States general information

Media for Salman v. United States

Audio Transcription for Oral Argument - October 05, 2016 in Salman v. United States

Stephen G. Breyer:

No, my bigger question is why -- why do all the disclosure forms we have to fill out? They have a lot of relatives.

You have to put, like, your minor children, your wife.

And in giving gifts, you have to disclose your minor children, your wife. I mean, why are the statute books filled with instances where the public wants to know, not just how you might benefit, but how your family might benefit?

Alexandra A. E. Shapiro:

Well, Your Honor, the statute books are filled with rules like that, but Section --

Stephen G. Breyer:

Because --

Alexandra A. E. Shapiro:

-- 10(b) --

Stephen G. Breyer:

No, no, I realize it doesn't, but I mean, I'm looking for the reason why. And of course I can suggest a reason.

Because they think very often, though it depends on families, to help a close family member is like helping yourself.

That's not true of all families --

Alexandra A. E. Shapiro:

Well, Your Honor --

Stephen G. Breyer:

-- but many, it is.

Alexandra A. E. Shapiro:

I think that the important thing here is that the statute doesn't address this. And Congress could certainly pass a statute --

Stephen G. Breyer:

Do you think it addresses benefits?

Alexandra A. E. Shapiro:

No, the statute --

Stephen G. Breyer:

I mean, the statute doesn't, but there's a long history, and the person who's been defrauded, I take it, or the object of deceit is the company whose information you use.

And when you use their information, which you shouldn't, and tell it to someone, you're hurting them.

And then there's a subset of cases that we prosecute.

And the subset of cases we prosecute are the cases where, having used that information, you use it to benefit yourself. And the question, I take it, is when you use it to benefit a close family member, is that, in effect, benefitting yourself.

Cecil B. DeMille said -- or maybe Jack Warner -- rule of relativity: Never hire a relative.

You could have -- you could have that view, but you also have the view that helping a relative is helping yourself. Now, that seems to me where we are in this case, and the law is filled with instances where they do seem to think it's the same.

And there are a lot of cases here that think it's about the same, so why isn't it?

Alexandra A. E. Shapiro:

Well, Your Honor, there aren't a lot of cases, and the only cases that this Court has decided are Chiarella, Dirks and O'Hagan.

The only case in which the Court held for the government was O'Hagan, and the insider was making his own profits to the tune of $4 million.

Elena Kagan:

Ms. Shapiro, you're asking us to ignore some extremely specific language in Dirks, which of course, was decided quite some time ago.

So I'm just going read in Dirks. The Court is talking about when it would be proper under the statute to convict somebody for insider trading, it's because there might be a relationship between the insider and the recipient, or an intention to benefit the particular recipient.

And then it goes on to say, "When an insider makes a gift of confidential information to a trading relative or friend," and then in the last paragraph of the opinion, where it's really summing up everything that it's done, the Court says, "The tippers received no monetary or personal benefit, nor was their purpose to make a gift of valuable information to the tippee." So there's a lot of language in Dirks which is very specific about, it's not only when there's a quid pro quo from the tippee to the tipper, but when the tipper makes a gift to the tippee, and in particular a relative or friend.

Alexandra A. E. Shapiro:

That's right, Your Honor. Dirks does mention gifts, but I don't think that --

Elena Kagan:

More than mention.

This is like half their holding.

Alexandra A. E. Shapiro:

Well, I don't -- don't agree, Your Honor.