SEC v. Christopher Clark, 60 F.4th 807

CEB engaged in merger discussions with Gartner from November to early December 2016; the CEB board approved moving forward with Gartner’s $77/share proposal on December 9, 2016.
William Wright (CEB Corporate Controller) exchanged November 3 emails with Chief Accounting Officer Barron Anschutz about how a change of control would affect unvested stock and was later "brought under the tent" about merger talks; Wright began contacting recruiters in early December.
Christopher Clark (Wright’s brother‑in‑law) began aggressive purchases of CEB call options on December 9, financed by borrowing and withdrawals; he made similar trades through early January and realized large profits after the January announcement.
Clark instructed his son to make parallel trades; both later lied to the FBI about those communications.
The SEC sued Clark for trading on inside information allegedly passed from Wright; Wright settled pretrial. The district court granted Clark’s Rule 50(a) motion for judgment as a matter of law, but the Fourth Circuit reversed, holding sufficient circumstantial evidence existed for a reasonable jury to find insider trading.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether evidence supported that Wright possessed material nonpublic merger information by Dec. 9, 2016	Emails about change-of-control effects, Wright's recruiter emails saying he was "working on the merger," close communications with Anschutz, and timing support that Wright knew before Dec. 9	No direct proof Anschutz told Wright before Dec. 9; November emails predate Board approval and are speculative	Reversed: a reasonable jury could infer Wright had inside information before Dec. 9
Whether Clark received the tip and traded on it (tippee liability)	Clark’s sudden, unprecedented call-option trades beginning Dec. 9, heavy leverage, recruiting his son, and large profits permit an inference he received and acted on a tip	Clark had prior history trading CEB options and offered an investment strategy; district court found no suspicious motive	Reversed: circumstantial evidence suffices for a jury to conclude Clark traded on a tip
Whether district court properly granted JMOL (Rule 50)	N/A; SEC contends judge failed to view evidence in light most favorable to nonmovant	JMOL appropriate because evidence was speculative and credibility/financial motives undercut suspicion	Reversed: appellate court reviews de novo, must draw all reasonable inferences for SEC; credibility is for jury, not JMOL stage

Salmon v. United States, 137 S. Ct. 420 (2016) (tippee liability requires knowing the information was disclosed in breach of fiduciary duty)
Dirks v. SEC, 463 U.S. 646 (1983) (tipper breach doctrine governs tippee liability)
Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003) (circumstantial evidence can be as persuasive as direct evidence)
Moskos v. Hardee, 24 F.4th 289 (4th Cir. 2022) (conjecture and speculation insufficient to defeat JMOL)
Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655 (4th Cir. 1993) (nonmovant must present more than a scintilla of evidence to defeat JMOL)
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000) (credibility determinations are for the jury, not JMOL rulings)