My vague memory from studying for the CFA exam is that the tipper cannot unilaterally impose a duty not to act by giving unsolicited information. Something like a fiduciary relationship has to exist (except in special cases like a tender offer), and if an insider carelessly releases information where that relationship doesn't exist it can be traded on. Otherwise a CEO could just blurt confidential information to large shareholders at key times and restrict them from selling. Assuming he has a pretext to get around Reg FD, but that is something else I only vaguely remember. Does this sound right? It doesn't sound like there is a duty if he was just called out of the blue with an offer of stock. I agree he sounds like an a-hole but I am still curious if what he did was really illegal.