I already gave you the straight dope on the stupidity and futility of insider trading by employees of public companies in this post.  Let me follow that up by explaining some of the very real hazards of a corollary to this: public company employees who learn inside information and who do not engage in any trading, but who share this information with a friend or other person who then trades on that information. 

Well, you say, the employee didn't trade and never made a dime off of the information, so what kind of trouble could he/she personally get in for that?  Wouldn't the friend/trader be the only one on the hook in any insider trading case?  Ummm, no. 

Take a look at yesterday's litigation release by the SEC about its case against against Brian G. Paquette, the former Vice President of Product Management at LendingTree, Inc.  The SEC alleges that shortly before a public announcement that LendingTree was being acquired by another company at a substantial premium to LendingTree shareholders, Paquette improperly provided material nonpublic information concerning the pending acquisition to a fellow employee and to a close friend outside the company.   The SEC further alleges that both the fellow employee and the close friend then purchased shares of LendingTree while in possession of this material nonpublic information.  After the announcement, the price of LendingTree stock soared and Paquette's tippees allegedly sold their shares realizing unlawful profits of $2,109 and $12,420, respectively.   Paquette, however, is not alleged to have bought any stock.

The end result, however, is that the SEC sued the non-trading Paquette, who settled the case by agreeing to pay a $29,058 civil penalty, which is equal to two times the trading profits of his tippees.

Even worse for Paquette, the SEC's litigation release states that:

In a related criminal case, the U.S. Attorney's Office for the Western District of North Carolina announced today that Paquette has agreed to plead guilty to a felony obstruction of justice charge, for providing false testimony in the Commission's investigation.

So the end result of Paquette's alleged sharing of inside information with others is that (1) he got himself sued by the SEC for insider trading despite having never traded himself; (2) he had to pay a fine equal to double the profits made by his alleged tippees; (3) he ended up pleading guilty to a felony charge.  Other than that it worked out great for him.