Publication Date



This Article explores insider trading law's increasing
focus on personal relationships, and the way in which the
law has come to privilege professional over
nonprofessional insider trading. The Article discusses
how, in an effort to expand insider trading liability, the
government has sought to impose legal duties of loyalty
and confidentiality on a host of personal relationships not

otherwise subject to law-effectively basing civil and
criminal penalties on "corruption" in purely personal
relationships. At the same time, courts have adopted a
business property rationale regardingthe use of nonpublic
information and declined to prevent companies from
disclosing valuable nonpublic information to select market
professionals, who may then lawfully trade. The current
legal framework thus permits trading on tips by
professional investors, while penalizing this same trading
by others. This problem is demonstrated by the divergent
outcomes in United States v. Newman and Salman v.
United States. After Newman and Salman, personal
relationships are likely to be an increasing focus of
enforcement. Because of the disparate treatment of
trading on tips by professional versus nonprofessional
traders, however, this focus does little to advance overall
market fairness.