> So it's illegal "when an insider makes a gift of confidential information to a trading relative or friend." But if you read that too literally, you run right back into the first problem. There you are, at your job, talking on the phone with a company's investor relations department. The IR guy helps you with some questions about your model. You get off the phone convinced that the company is a buy. You go to buy stock. But wait. Your relationship with the IR guy is pretty cordial. You mentioned your love of fishing, and he said, "Hey, we ought to go fishing together sometime," and you said, "Sure, that sounds great," not that either of you meant it.
That's messed up. It should be a breach of fiduciary duty to continue to interface as investor relations with an investor who you have established a friendship with. Being friendly on the phone is one thing, but join family vacations? As the relationship becomes closer, the fishier any exclusive information provided should smell.
You become friends with someone? At a certain point both the investor and and investore relations personel should have to hand off the professional relationship to colleages to avoid the risk of insider trading charges.