The term insider (comes from English and literally means "the one who is inside") refers to the person or persons who, due to their position within a corporation, normally in the management bodies, have knowledge of confidential or privileged information about financial state (or any kind) of a company; as well as decisions about the present and future decisions of a company.
In general, insiders are those people who occupy important positions on the boards of directors of companies. It includes from the president to the directors that may exist; since they are the ones who make the decisions and set the guidelines and measures that the company will adopt for its development. Therefore, they are considered individuals who have practically all the information about the real state of the business.
As might be expected, all the decisions of this group of "privileged" are of vital importance in the context of the bag. This is because the transactions carried out by this group are often used as an index of confidence towards a company in which there is an intention to invest.
There are many companies in which CEOs are paid in the form of shares. In this way, an incentive is given to people who make the company have more value and therefore their shares are revalued. For this reason, on many occasions and as time goes by, these directors can sell or buy more shares for personal reasons or because they know, first-hand, the state of the company.
Obviously, it is an illegal practice and punishable by law since the use of privileged information is considered a crime. That is why the National Securities Market Commission (CNMV) stipulates that the communication of the purchase and sale of shares in a company must be made publicly if it is by the directors of the same.