All eyes were on the U.S. Supreme Court yesterday as it heard arguments in Salman v. United States (No. 15-628) concerning the “personal benefit” required to establish a claim for insider trading. After an hour punctuated by the Justices’ constant questioning of attorneys for both the defendant and the government, it appears unlikely that the Supreme Court will radically depart from its 1983 decision in Dirks v. SEC, which held that insider trading violates the federal securities laws if an insider makes a gift of nonpublic information to a trading relative or friend.

According to a transcript of yesterday’s hearing, Bassam Salman’s attorney argued that Salman should not be held criminally liable for insider trading because the original tipper – Salman’s future brother-in-law, who had worked for an investment bank – had tipped confidential information to his brother without receiving any financial benefit. Salman’s attorney maintained that, unless and until Congress enacts a definition of insider trading, the crime of insider trading should be limited to cases where the insider tipper receives a financial benefit.

However, some of the Justices seemed worried that adopting Salman’s argument would conflict with the Supreme Court’s decision in Dirks. “You’re asking us to cut back significantly from something that we said several decades ago, something that Congress has shown no indication that it’s unhappy with,” said Justice Elena Kagan. “[O]bviously the integrity of the markets are a very important thing for this country. And you’re asking us essentially to change the rules in a way that threatens that integrity.”

A number of the Justices appeared to concur that gifting nonpublic information to a family member benefits the tipper. Justice Anthony Kennedy said “you certainly benefit from giving to your family. . . It ennobles you and, in a sense it – it helps you financially because you make them more secure.”

Whether that rationale should apply to an unrelated friend, however, is less clear. The Justices grappled with the question of whether criminal liability arises in more attenuated relationships not involving family members or even close friends, such as when a tipper tips nonpublic information to his barber or to a down-on-his-luck stranger on the street.

Whether the Supreme Court ultimately draws such a line remains to be seen. Justice Stephen Breyer said “I am worried about line drawing,” and Justice Kagan asked “why not separate out that strange, unusual, hardly-ever-prosecuted situation and say we’re not dealing with that here? We have nothing to say about it.”

As we have previously written here, the Supreme Court’s decision could resolve a possible split between the Ninth Circuit and the Second Circuit on the type of “personal benefit” that constitutes a violation of the federal securities laws. In particular, in the 2014 decision in United States v. Newman, the Second Circuit held that, to the extent that “a personal benefit may be inferred from a personal relationship between the tipper and tippee, . . . such an inference is impermissible in the absence of proof of a meaningfully close personal relationship that generates an exchange that is objective, consequential, and represents at least a potential gain of a pecuniary or similarly valuable nature.” The Supreme Court previously denied certiorari in Newman, but, during yesterday’s hearing, at least one Justice might have questioned the Newman decision. Justice Breyer commented that to adopt the Second Circuit’s “minority” approach “is really more likely to change the law that people have come to rely upon than it is to keep to it.”

Both Wall Street and prosecutors nationwide await the Supreme Court’s decision with anticipation, hoping that it will provide clarity on criminal liability for insider trading based on tipping – especially in situations not involving family members.