The chain starts with a tipper who breaches a duty by disclosing material-non-public-information and receives a personal benefit. Benefit is read broadly and includes reputational gain, a quid pro quo, or a gift of information to a trading relative or friend.
A tippee inherits liability only if they knew or should have known of the breach. Remote tippees several steps down a chain have been prosecuted where the circumstances made the source obvious, and acquitted where knowledge could not be shown.
Practical consequence for a trader: the source of an unusually specific tip is the legal question, not how you would have traded anyway. Acting on a friend-of-a-friend earnings leak is the fact pattern that produces criminal cases.
Related: insider-trading, material-non-public-information, misappropriation-theory, rule-10b-5