Is Bhagat liable as an insider even though he was a relative

Is Bhagat liable as an insider even though he was a relatively low-level employee? Why?

Solution

Ideally insiders derive their identity when performing at high levels within an organization.

But it does not mean that low level employees like Bhagat cannot be held liable as insiders. An insider is a person who gives away a confidential information regarding the operations of the company. This information has not been made public yet by the company. Leak of such information results in insider trading, whereby some people will profit from rise in prices of shares.

As such low level employees like floor mechanics at the production department can have information about new developments and confidential information related to production.

If the low level employees\'s action results in insider trading, he can be held liable.