My understanding is that "knowledgeable outsiders", in executing trades, effectively make accessible whatever esoteric-but-technically-public information they had to the market, and so help prices adjust toward their correct value.

Knowledgeable insiders, on the other hand, can execute "hidden" trades that aren't revealed to the public market—and so don't provide information to the market. This distorts the market, moving the value of the instrument away from its true price.