Which of the following statements about insider dealing is CORRECT?

The statement that a person is considered an insider if they possess unpublished price sensitive information is accurate. Insider dealing laws are designed to protect the integrity of financial markets by preventing individuals with access to confidential information from exploiting that knowledge for personal gain. This means that any individual who has access to significant, non-public information about a company—such as earnings predictions, potential mergers, or new product developments—can be classified as an insider.

Insider dealing laws also emphasize the importance of the information being unpublished; once information becomes public, it loses its status as price-sensitive, and the legal restrictions on trading based on that information no longer apply. This distinction is critical because it ensures that all investors have equal access to relevant information when making investment decisions.

In this context, the requirement for a connection to the company, while relevant in other legal discussions regarding the source of information, does not negate the broader definition of who qualifies as an insider solely based on the possession of unpublished price-sensitive information. Thus, option C effectively highlights the core principle of insider trading regulations.