Insiders are allowed to trade the stock of the company they work for. They just can't make a trade which is motivated by non-public insider knowledge. For example, if the company was going to have another bad quarter the insiders can't dump their stock in advance of the public release date. Most of the time, insiders will have a schedule set up and announced well ahead of time for when they want to sell stock, to avoid being accused of selling in reaction to some negative event for the company.

Insider trading as in: Reading the SEC reports that insider parties have to submit in order for them to be able to trade the stocks.

This is pretty common, for example I've found a site that uses the same reports I read to trade with a strategy http://www.smarteranalyst.com/daily-insider , I know a guy who works there and he eats his own dogfood (invests with the strategy) and so far he's claiming good profits.

Personally I don't really buy into it yet but we'll see.