Apparently it’s legal for a corperate officer to sell his company stock for whatever reason. Even if he knows the company is going belly up and before it’s made public. Yet, if he tells a friend to sell because said company is going belly up and said friend sells, the friend is guilty of insider trading.
Is this true? If it is it’s true hypocricy.
I don’t know where you heard that, but I’m, 95% certain that’s BS. Insider trading is any stock transaction conducted based on knowledge that is not publicly available. Doesn’t matter if you’re a company officer or not.
No, it’s not true. Officers of public companies may not sell stock if they are in possession of material inside information about the company. Further, most companies have time periods (“windows”) during which some or all officers may not sell because they are presumed to be in possession of such information even if they’re not (the run-up to an earnings announcement, for example).
Actually, when I worked for Gateway, I recall signing an agreement(or saw it in the employee handbook) that dictated a window of when I could not trade securities involving the company (ie, no trading any company stock for 3 days after earnings announcements), and I was just a front-line tech, not anyone important or anything, so it’s not necessarily limited to officers of a company (depending on the company, natch 
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critter42