Opinion ID: 1086522
Heading Depth: 3
Heading Rank: 1

Heading: Tippers’ breach of duty and benefit

Text: Jiau argues that the evidence was insufficient to establish that her two insider-tippers, Nguyen and Ng, benefited personally from the disclosures they made to her. Instead, she asserts, the trial evidence showed only that Nguyen gave her NVIDIA’s earnings data “out of sheer desperation” to stop her relentless pestering of him for information and Ng shared similar data from Marvell because he was lonely and valued her friendship. Appellant Reply Br. 7. These arguments are unavailing. “Personal benefit” is “broadly defined . . . [to] include[] not only ‘pecuniary gain,’” Obus, 693 F.3d at 285 (quoting Dirks, 9 463 U.S. at 663), but also, inter alia, any “reputational benefit that will translate into future earnings,” Dirks, 463 U.S. at 663, and “the benefit one would obtain from simply ‘mak[ing] a gift of confidential information to a trading relative or friend.’” Obus, 693 F.3d at 285 (quoting Dirks, 463 U.S. at 664). The existence of “a relationship between the insider and the recipient that suggests a quid pro quo from the latter, or an intention to benefit the [latter]” may be sufficient to justify an inference of personal benefit. Id. at 664. The benefits to Nguyen from tipping were manifold. Jiau treated him to meals at restaurants and gave him gifts including an iPhone, live lobsters, a gift card, and a jar of honey. She also provided Nguyen with insider information about other stocks and the two formed an investment club. The evidence of personal benefit to Ng, while less abundant, is no less dispositive on this issue. Nguyen testified that Jiau asked him to recruit others into their investment club and he invited Ng, because Ng liked to trade stocks and had access to inside information at Marvell. The fact that Ng did not receive any tips from Jiau’s investment club in return for the tips he gave is of no moment. In joining the investment club, Ng entered into a relationship of quid quo pro with Jiau, and thus had the opportunity to access information that could yield future pecuniary gain. The proof required to show personal benefit to the tipper is 10 modest and is satisfied with respect to both Nguyen and Ng. See Obus, 693 F.3d at 292 (“In light of the broad definition of personal benefit set forth in Dirks, this [evidentiary] bar is not a high one.”).