Not illegal, nonetheless have characteristics of a Ponzi scheme, and you can see it in the difference between the cash flow they report and the earnings. If and when sales slow down, the cash flow disappears...look out below.
There is a difference between a good company and a good stock. While Salesforce.com is a pretty good company, it is a bad investment. Even though the price is almost half of what it was at its peak, and earnings have doubled, the P/E hovers around 100. The company is overvalued. The rumors that the company will be acquired by Oracle have kept the company's stock price unnaturally high.
The insiders are well aware of it and have been selling for the last 1 year. It would be prudent to wait till CRM reports some good numbers before buying in.