> Insider trading consists of an individual who is an insider to a company that is publicly traded, trading stock in that company on information they obtained as an insider.

No, that's not true in US law. It doesn't have to be the stock of the company you work for to get you into insider trading trouble.

> Warren Buffett is not a publicly traded company, and in this hypothetical he is buying stock in another company, which (by assumption) he has no insider information about.

Well, that's why your definition is wrong.

> If it was about protecting shareholders (from what?) then it would apply to all companies.

Huh, what? You don't have a fiduciary duty to people you don't work for.

See https://en.wikipedia.org/wiki/Insider_trading#Misappropriati...