Bassam Salman

In a unanimous decision, the US Supreme Court justices ruled that prosecutors in insider trading cases don’t always have to demonstrate that something of value was exchanged to prove that the crime happened. The court’s ruling comes two years after another decision, in United States v. Newman, raised questions regarding what comprises insider-trading. That decision led to the dismissal of a number of insider trading cases.

This week, however, in Salman v. United States, the nation’s highest court gave the government back some of the power it lost in the earlier federal court case. The justices’ opinion upheld the prosecution of Bassam Salman, a man convicted of insider trading.

Salman admitted to trading on the information given to him by his brother-in-law Maher Kara, a Citigroup (C) investment banker. Prosecutors accused him of making $1.5M by trading on tips about biomedical company acquisitions involving Citigroup clients.

The U.S. Supreme Court is hearing an insider trading case in which a man convicted of the crime is disputing that decision. Bassam Salman claims that he should not have been convicted of insider trading and that the trading he engaged in was not illegal.

Salman made nearly $1.2M trading on information provided by his brother-in-law. The information he traded on had to do with deals involving Citigroup Inc. (C) clients. His relative, Maher Kara, was an investment banker there.

However, as Salman’s lawyer argues, prosecutors have to prove that the alleged source of insider information in insider trading cases obtained a tangible benefit in return for providing the tip. Salman maintains that his brother-in-law did not make such a gain.

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