Insider trading involves trading stocks or securities based on non-public information, which is illegal in many countries. Examples provided include corporate executives and employees trading after learning confidential corporate information, as well as "tippees" like friends and family members of executives who receive insider information. The document also outlines a major hedge fund insider trading case in the United States involving Raj Rajaratnam and others alleged to have profited over $60 million based on non-public information received from corporate contacts.