I don't see your point. Friedman wasn't saying that the market would know that a specific executive was selling or buying stock, but rather, that the very act of anyone selling or buying stock by definition affects the price of the stock, and that it's better to allow people with the most information about a stock to influence the market.
This didn't stop the huge asset bubbles that formed due to the opaque markets of derivatives from forming.
Buying and selling pressure don't communicate things like size very well, but its often an extremely important point that we need to consider when thinking about the health of a market.
