SCOTUS Wary Of Limiting Insider Trading Convictions

The Supreme Court this week was hesitant to cut back on the government’s power to prosecute insider trading cases, even if the insider in question is a friend or family member. In the case before the court, a Chicago grocery wholesaler made $1.7 million in stock profits from trading on information from a brother-in-law in California, who himself learned it from his younger brother, an investment banker for Citigroup. Because Congress has never explicitly defined insider trading, defense lawyers in this case urged the Supreme Court to curtail prosecutions like this one, dealing with non-traders who learned information through friends or family. However, “You are asking us to cut back significantly … and change the rules in a way that threatens the integrity of the markets,” said Justice Elena Kagan. Justice Stephen Breyer said, “To help a close family member is like helping yourself. It would change the law to accept [the defense’s] argument.”