So that stuff you're learning about insider trading is, like, important. Luckily for us, the recent SEC insider trading enforcement action provides the perfect example of how insider trading works and why you've seen questions about "firewalls" or "Chinese Walls" that are supposed to separate a broker-dealer's investment banking division from the trading division. Notice how the individual at the link below knew about upcoming deals and then both passed out and traded upon this knowledge.
Can't do that--it's like shooting fish in a barrel, and the SEC wants to maintain a fair and orderly market for securities so that people don't just walk away and refuse to provide capital to companies and governments issuing securities on the primary market. I have nothing to add here--just read the news story at the link below, or click the title, which is always a URL, as well.