insider
An insider, in the context of securities and business law, refers to an individual who is a senior director or officer of a publicly traded company or individual who owns more than 10 percent of shares and voting rights of the company. Insiders have nonpublic information about a corporation due to their position or intimate association with the corporation. Insiders include the officers, directors, and employees of a corporation, but also those working in a fiduciary capacity for the corporation, such as attorneys and accountants. Insiders most follow strict guidelines, generally set by securities legislation, when disclosing information in regard to the buying and selling of shares of their company. The use of such nonpublic information when trading stocks or other securities may constitute insider trading, which is a crime under the Securities Exchange Act.
[Last reviewed in October of 2024 by the Wex Definitions Team]
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