Who is considered an insider in a securities context?

In the context of securities, an insider is defined primarily as a person who has access to non-public, material information about a company due to their position or relationship with that company. This includes executives, directors, and major shareholders. The correct answer considers both ownership and position: a person who owns more than 10% of any security and is a director or officer is typically classified as an insider because they possess critical information that could influence the company's stock price and trading behavior.

Having a significant ownership stake (more than 10%) indicates that the individual has influence over the company's decisions, while being an officer or director grants them access to sensitive information as part of their role. Insiders are subject to strict regulations concerning trading on this information to prevent insider trading, which is illegal and unethical.

In contrast, individuals with only basic knowledge of stock or those classified as large investors may not necessarily have access to insider information. Similarly, while investment bankers may handle insider information in the course of their work, they do not automatically qualify as insiders unless they meet specific criteria regarding ownership and position.