Is there any rule or provision preventing them from short selling the stock in another account?
They could theoretically conspire with another person who runs the trade but eventually compensates the principal. They'd only be found out through regular white collar crime fighting measures: parallel construction from NSA sigint for example.
It's the same here. Buying/selling options on Lyft as an employee is against their employment contract, and probably SEC rules. If they make a few thousand dollars doing it, chances are no one will find out.
If they make a few million, the SEC will probably look into that.
I’m not sure about the case of an employee that has left the company, but I expect that it would still qualify as insider trading through some window.
The rules aren’t there just because Lyft wants to be mean, they’re there because regulations require it and also because one of the guiding principles is “no perception of insider trading”. That means you have to avoid behaviors that might look like insider trading.
A current or recent insider using hedging is very suspicious looking. What do they know?
When I left Netflix I was warned that I needed to wait at least three months before making any trade other than buy. And I was still restricted to the employee trading window for six months.
Irregular options activity does get noticed and investigated, take a look at some SEC enforcement actions for insider trading: https://www.sec.gov/spotlight/insidertrading/cases.shtml
If a Lyft employee quits 2 months ago, and then buys puts on their lockup RSUs, I don't see how this is something the SEC cares about. At worst it's a contractual agreement between the employee and Lyft, no?
Basically, Lyft would have agreed with the underwriters not to exchange RSUs for the underlying shares of stock, so the employees couldn't sell any shares on the market. The RSUs, by their terms, generally have restrictions on who they can be sold to--usually just back to the company or purchasers approved by the company. If those restrictions are not adhered to, then the issuer of the RSU (i.e., Lyft) can void the sale transaction.