Insider Insider Trading Under U.S. securities law, the term “insider” is technically used to refer to any individual who is an officer or a director of an issu

Insider Insider Trading Under U.S. securities law, the term “insider” is technically used to refer to any individual who is an officer or a director of an issuer or who is a beneficial owner of more than 10% of any class of an issuer’s outstanding securities. Insiders are subject to special reporting requirements and certain other restrictions upon their ability to trade securities of the issuer. Because of their relationship with the issuer, these individuals are also more likely to become aware of material, nonpublic information regarding the issuer. However, for purposes of insider trading rules and regulations, insiders are not just limited to those who meet the technical definition of a corporate insider. Any individual who has special access to or otherwise comes into possession of material, nonpublic information regarding an issuer could be considered an insider. If such an individual trades in the securities of the issuer based on this information, he or she is considered to have engaged in insider trading and may be subject to both civil and criminal penalties.