Ninth Circuit limits Newman’s reach. Defendant-Appellant Bassam Yacoub Salman appealed his conviction for conspiracy and insider trading. He argued that the evidence was insufficient to sustain his conviction under the standard announced by the US Court of Appeals for the Second Circuit in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), which held that to convict a downstream insider trading tippee, the Government must present sufficient evidence that the tippee knew that the information received had been disclosed in breach of a fiduciary duty in exchange for a personal benefit. Affirming Salman’s conviction, the US Court of Appeals for the Ninth Circuit held that the Government’s direct evidence that the disclosure was intended as a gift of market-sensitive information was sufficient. The Court rejected defendant’s claim that a pecuniary or other tangible benefit was also required. (7/6/2015) US v. Salman.
Under Indiana law corporation can vote its own shares. Holders of Emmis Communications’ preferred shares claimed that Emmis violated Indiana law by voting some shares. Plaintiffs argued that although Indiana allows corporations to vote their own shares, they may vote only “outstanding” shares. Plaintiffs further argued that Emmis lost its votes because the shares were held in escrow pending a “swap” and were, therefore, no longer “outstanding.” Affirming dismissal, the US Court of Appeals for the Seventh Circuit found that Indiana allows corporations to deal in and vote their own shares. Indiana law gives voting rights to record owners, and the parties involved in the swap of the shares were the record owners. (7/2/2015) Corre Opportunities Fund LP v. Emmis Communications Corp.