In this article, we covered a number of topics, including, what constitutes an insider, the differences between legal and illegal insider trading, some famous insider trading cases, the differences between insider trading and misappropriation, and how "tipping" someone off works with tippers and tippees.
Some key points to keep in mind are that insiders have fiduciary duties to their shareholders to refrain from acting on inside information, and have the duty to report inside information promptly to their shareholders. Also, even if you’re not an insider, you can be held liable as a misappropriator of inside information.
So, if you ever hear about inside information dealing with a public corporation, you should first assess if that information is readily available to the company’s shareholders. If not, you may want to keep your mouth shut or seek a lawyer for advice on how to proceed. And remember, it pays not to gossip!