Like many legal concepts and practicalities, Zdreg, that actually varies hugely from country to country: in some places it's almost entirely undefined and established only by precedent; in others, it's almost entirely and strictly defined by statute, with very little room for precedent-based interpretation.
So why wouldn't you forbid such trading at all, rather than sueing people for not agreeing to lose a trade you've allowed them to do?
Sorry, I don't understand what you're trying to convey. If you mean banning all ownership of your own company's stock, then you'd pretty much be throwing out the entire entrepreneurial business model of the U.S. and would ensure that most of the startups that are now public companies (from Microsoft and Google to Amazon and Intel) wouldn't have happened.
Well, point taken, I guess that was dumb of me. It's just that I feel this concept of "inside trading is bad, you should accept the losses even if you know about them and could avoid it" is quite wrong.