Quote: That is why I would think the executive who sells a competitor's stock short when he can't buy his own, is likely breaking the law.
This is so obviously insider trading.
Quote: As far as someone overhearing executives and then trading on it, my take would be that he gets off
He'd only get off if they couldn't prove he was acting on information that he overheard. If they could absolutely prove that he had the knowledge, and that that knowledge led him to purchase the stock, he would most certainly be guilty of insider trading.
Quote: ... that the executives reimburse those who lost money due to their carelessness.
I'm not sure exactly what you mean by "reimburse", whether you mean the executives shell out their own cash or if they do something with company money. Either way I've never heard of this happening. Each decision the executives make should be to maximize shareholder value, regardless of what has happened in the past.
Quote: I have come upon information that gives me an irrefutable giant edge because no one else has it. Or because those others who have it are precluded from trading on it. I came upon this information without breaking any laws. (It may or may not be by accident. You tell me if that matters.)
It does not matter if you came upon the information accidentally or not.