Whether a remote tippee's mere knowledge that a friendship exists between the insider and first tippee is sufficient to establish the remote tippee's knowledge that the insider received a personal benefit

QUESTIONS PRESENTED Liability for insider trading arises when someone acts on material nonpublic information. Dirks v. SEC, 463 U.S. 646, 653 (1983). That person may be an insider who has access because of their position, or that person may be a tippee, an outsider who receives the information. Jd. There is no general duty to abstain from trading solely because one knowingly receives material nonpublic information. Jd. Instead, the duty arises from the insider’s fiduciary duty to the corporation. Id. In the case of a tippee, who has no such relationship to the corporation, a duty exists only if the insider’s disclosure is a breach of fiduciary duty. Id. at 655. An insider’s disclosure is a breach if the insider receives a direct or indirect personal benefit. Jd. at 660. This Court has held that the personal benefit to the insider may often be inferred from the insider’s intention to benefit the tippee or make a gift of confidential information to a trading relative or friend. Jd. at 664. Thus, the relationship between the insider and the tippee often serves as the proof of the personal benefit to the insider. See, e.g., SEC v. Obus, 693 F.3d 276, 291 (2d Cir. 2012). A tippee is only liable if the tippee participates in the insider’s breach, which requires the tippee to know that the insider disclosed in exchange for a personal benefit. Salman v. United States, 580 U.S. 39, 42 (2016). However, when a tippee is more remote, having no contact with either the insider or the first tippee, the following questions arise: 1. Is a remote tippee’s mere knowledge that a friendship exists between the insider and first tippee sufficient on its own to establish the li QUESTIONS PRESENTED — Continued remote tippee’s knowledge that the insider received a personal benefit, particularly where, as here, the insider received a pecuniary personal benefit, of which the remote tippee had no knowledge? 2. Is a remote tippee within a larger insider trading conspiracy part of a more narrow conspiracy where he is unknown to the insider and provides the insider no benefit, as the Second Circuit held in Geibel, or is such an argument limited only to the insider and foreclosed to the remote tippee, as the Seventh Circuit held in this case?