WASHINGTON—The Supreme Court on Tuesday cemented the ability of prosecutors to pursue insider trading cases based on tips passed along among friends and family.

The court, in a unanimous opinion by Justice Samuel Alito, affirmed the conviction of a Chicago man for trading on inside tips from relatives.

The ruling rejected arguments by defendant Bassam Salman, who traded on information originally from his brother-in-law who worked as an investment banker at Citigroup Inc. He was convicted in 2013 and sentenced to three years in prison.

Mr. Salman had contended that evidence of a family relationship between the tipper and the tip recipient wasn't enough to support a conviction.

The high court disagreed, saying an earlier 1983 Supreme Court decision easily resolved the case against Mr. Salman.

Justice Alito said the earlier high-court precedent "makes clear that a tipper breaches a fiduciary duty by making a gift of confidential information to a trading relative, and that rule is sufficient to resolve the case at hand."

Write to Brent Kendall at brent.kendall@wsj.com and Aruna Viswanatha at Aruna.Viswanatha@wsj.com

 

(END) Dow Jones Newswires

December 06, 2016 11:05 ET (16:05 GMT)

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