Financial advisers working within a network of trusted relationships may, at some point in the course of conversation with clients, close friends or colleagues, find themselves privy to confidential trading information. A recent court case demonstrates the need for advisers to be more careful than ever to avoid insider trading criminal liability.

In December, the U.S. Supreme Court issued a unanimous decision in Salman vs. United States, the first insider trading case to come before the nation's highest court in more than two decades. This ruling upheld a prior landmark insider trading case that established the illegality of family and friends profiting from the disclosure of nonpublic material information, even in the absence of a monetary benefit to the tipper.

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