It is against the law (in the US) to buy or sell a public company's stock if you have 'inside' (ie, non-public) information about the company. The information could be anything that might affect the stock price: the gain (or loss) of a huge client, a massive layoff, a lawsuit or government investigation, or an unexpected profit or loss. You don't necessarily have to be a top executive to have access to this kind of information. Even a junior employee in the accounting, legal, or sales depts might hear something that could affect the stock price. My advice is simple: don't do it.
You might think you can be clever and tell your cousin or next-door neighbor to buy the stock and you'll split the profits. The SEC is on to you. They have sophisticated programs that go back months to look at the trades in companies with big price changes. Especially if you're not particularly active in the stock market and all of a sudden you place a big bet on your own company, you're going to have some explaining to do.
Are you smarter than Martha Stewart? She spent five months in prison because she acted on an insider tip. There is a long list of celebrities and hedge fund managers who have had to defend themselves against insider trading charges.
Sometimes the information you get isn't about your own company, but a vendor or a client. Maybe your company is about to place a huge order with a vendor which could cause its price to soar. That's still inside trading. When I was at Price Waterhouse we developed financial plans for people being downsized. I had early knowledge of massive layoffs of very well-known companies. Even had I been dumb enough to try and trade on this information, it was never clear whether to bet against the company (because of the layoffs) or bet on the company (because of the lowered expenses).
It's illegal. Don't do it.
