On December 6, 2016, in Salman v. United States., in a unanimous decision, the Supreme Court rejected the Second Circuit's holding in Newman that the tipper of confidential information to a trading friend or relative must also receive something of value in exchange for the tip to find that insider trading occurred. ( (U.S. Dec. 6, 2016).)

Maher Kara was an investment banker at Citigroup who dealt with highly confidential information about mergers and acquisitions involving Citigroup's clients. Soon after starting his job, Maher began discussing aspects of his job with his older brother, Mounir (Michael) Kara. Michael started trading on the information that Maher shared with him. At first Maher was unaware of the Michael's activity, but eventually he began to assist him by sharing inside information about pending mergers and acquisitions. However, without Maher's knowledge, Michael fed the information to others including Bassam Salman, Michael's friend and Maher's brother-in-law. Salman made over $1.5 million by the time the authorities discovered the insider trading.

Salman was indicted on one count of conspiracy to commit securities fraud and four counts of securities fraud. A jury in the Northern District of California convicted him on all counts. After the trial court denied his motion for a new trial, Salman appealed to the Ninth Circuit.

On appeal, Salman cited the recent Second Circuit decision of United States v. Newman (773 F. 3d 438 (2d Cir. 2014), cert. denied, 136 S.Ct. 242 (2015)). He argued that because there was no evidence that Maher received anything of value for his tips, no inside trading occurred and his conviction should be reversed. The Ninth Circuit rejected this argument and affirmed the lower court's decision, relying on Dirks v. SEC, 463 U. S. 646 (1983). The Supreme Court granted certiorari to resolve the resulting circuit split.

The Supreme Court affirmed the Ninth Circuit. In doing so, the Court rejected the Second Circuit's holding in Newman that the tipper must also receive something of value in exchange for the tip to find that insider trading occurred. When an insider makes a gift of confidential information to a relative or friend, the profits from trades executed by that relative or friend should be viewed as though the tipper, not the friend or relative, had executed the trades and then gave the profits as a gift to the relative or friend. In other words, a gift of confidential information to a friend or relative is enough to infer a benefit to the tipper under Dirks.

In the present case, Salman's jury was properly instructed that a personal benefit includes "the benefit one would obtain from simply making a gift of confidential information to a trading relative." By disclosing confidential information as a gift to his brother with the expectation that he would trade on it, Maher breached his duty of trust and confidence in Citigroup and its clients. In turn, Salman inherited and breached this duty himself by trading on the information with full knowledge that it had been improperly disclosed.