You can't trade on insider information, i.e. information you've gained from a corporate insider who has a duty not to reveal it. If Steve Jobs tells you he has cancer, it's insider trading to short AAPL. If you pass Steve Jobs on the street and think "holy shit, that guy looks sick", you are free to short AAPL.
Trading another company's stock based on secret information is also very much legal. Mark Cuban practically made a sport out of it with http://sharesluth.com
Now if there was major market collusion by industry giants to combine data and do horrible things, you're getting out of my knowledge range, but there's nothing generally illegal about trading on info nobody else knows about.
If you discover it for whatever reason, and have no actual relation to the company, I don't think it counts - that's how Mark Cuban gets by with Share Sleuth.
That said, IANAL, so don't take that as legal advice :)
Of course, it's an open secret that insider trading is rampant in all major stock markets. You can’t police every pair of CEO golf buddies. I can’t provide a cite, but a study done a few years ago confirmed major movements shortly before (hours) major announcements with the vast majority of stocks in the Canadian exchanges. I’d expect the problem to be greater in the US markets.