It appears that insider trading is pretty much legal now. Here are excerpts from the article in the New Yorker:
… the court … held that it is not enough to prove that someone traded on a tip that she should have known constituted material nonpublic information; instead, prosecutors need to prove that she was affirmatively aware of the dodgy provenance of the tip. The court also held that prosecutors must demonstrate that the original tipper was somehow compensated for offering the tip.
So, if I pass along an insider tip to a friend, and he/she uses it to get rich, and doesn’t compensate me (wink wink), then it’s all legal. I am stunned that this court ruling isn’t causing big waves. I guess that we all KNOW that the little investor can’t compete with the insiders so we just accept it.