Supreme Court affirms broad reach of insider-trading laws

The Supreme Court on Tuesday upheld the broad reach of insider trading laws, ruling that family and friends of corporate insiders can be prosecuted for profiting on secret stock tips even if they don't pay money or other compensation for the information. The unanimous decision affirmed the conviction of a Chicago man who made $1.5 million in stock profits by trading on confidential tips that originated from his brother-in-law, an investment banker in California. The justices rejected claims of defense lawyers who argued that there was no crime because no money exchanged hands between the insider and the stock trader. Instead, the court said exchanges within a family are like gifts and have value, even if no dollars are paid. The decision, the high court's first on insider trading in nearly two decades, is a major victory for federal prosecutors who have sought to bring insider-trading charges against a wider network of people who profit from confidential tips, including those who are not insiders themselves or have not paid to obtain the valuable information.