Who Counts as a Corporate Insider?

• →Officers: the CEO, CFO, president, and other executives with policy-making roles. They see the numbers first.
• →Directors: board members. Independent directors often see less day to day, but a director writing a personal check is still a considered decision.
• →10% owners: large shareholders, usually funds or founders. Their buys and sells are often portfolio decisions rather than a view on the next quarter.

A CEO or CFO buying on the open market is the cleanest signal, because they know the business best and their salary already depends on it. A director's buy is meaningful but quieter. A 10% owner topping up a position is often just rebalancing.

InsiderWatch attaches the buyer's role to every alert and weighs a senior officer's first buy in years more heavily than a routine top-up.

Being an insider is a reporting status, not an accusation. Insiders can legally trade their own stock as long as they do not trade on material non-public information and they report the trade on time.

The reporting rules do not cover everyone with a vice-president title. An officer for Section 16 purposes is the president, the principal financial officer, the principal accounting officer or controller, any vice president in charge of a principal business unit, division or function, and any other person who performs a policy-making role. A company decides which of its executives fit that description and those people become Section 16 filers. A regional sales manager with a VP title usually is not one; a chief operating officer always is.

The 10% test uses beneficial ownership as defined for Schedule 13D: shares the holder can vote or sell, plus shares they have the right to acquire within 60 days through options, warrants or conversion. Shares held by funds a manager controls are counted together. That is why a fund complex that owns 6% in one vehicle and 5% in another is a 10% owner and must file Form 4s, even though no single fund crosses the line.

Once a holder is above 10%, every trade is reportable. When they fall back below 10%, the trade that took them under is the last one they must report.

Every board member is an insider, including independent directors who work elsewhere. A fund that places its own partner on a board can also be treated as a director "by deputization", which pulls the fund's trades into Section 16 even below 10%. Venture and private-equity holders with board seats often show up on Form 4 for that reason.

• →Form 3 within ten days of becoming an insider, Form 4 within two business days of each trade, Form 5 for anything deferred.
• →The Section 16(b) short-swing rule: any profit from a purchase and a sale of the company's stock within six months belongs to the company, regardless of intent. This is why insider buys are rarely followed by quick sales.
• →Section 16(c): insiders may not sell the company's stock short.
• →Company trading policies on top of the law: blackout windows around earnings, pre-clearance of trades, and ownership guidelines that require executives to hold a multiple of their salary in stock.

A Form 4 states the filer's relationship to the company with checkboxes for director, officer and 10% owner, and a title line for officers. Some filers tick more than one: a founder who is chief executive, a director and a 10% holder at once. When reading a purchase, the title matters more than the checkbox. A chief financial officer or a chief executive is the person best placed to know what the next two quarters look like; a director who joined last year and works in another industry knows less; a 10% owner is often executing a mandate.