Matthew Cox | Inside True Crime Podcast - FBI's Most Valuable Stock Broker | Tipper X

Episode Date: August 23, 2024

FBI's Most Valuable Stock Broker | Tipper X

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Here's the private equity firm. She's like, oh, I'm going to make millions on this. Could you just take care of him? Could you write him a check for $10,000? And he's sliding me to FedEx envelope with cash over. So July 2008, I'm dropping off my dry cleaning. This guy on the sidewalk in Manhattan says, are you, Tom? I turn around.

We think you can help us out. So a hedge fund, what we did was we traded stocks, and hedge funds charge usually a 1 to 2% management fee on the assets that you manage to cover the overhead expenses, salaries, and costs. and the hedge funds also get to keep 20% of profits. So if you're up $50 million that year, you get to keep $10 million and divide that as bonuses.

So in my early 20s, I loved leaving investment banking, which was just sort of focused on servicing clients, and getting into the game where I'm actually seeing my percentage of the profits off my stock trades, like calculating Excel. And at 23, 24, 25 years old, that starts to become a number. I've never seen in my life. right it starts to become a big number and so that's happening i loved it because it was a meritocracy i called it there wasn't politics hey you pick the right stocks you're going to make a lot of money

right if you don't you're going to get fired and i liked actually having the scorecard there real time but that can also lead to making other decisions which we'll we'll talk about and other pressures so there's this need for a short-term performance we have investors who want to make money every quarter so we need shorter term opportunities you know to kind of make money in the short term to. There was 12 analysts at my first firm. So it's sort of like an NBA team where like, you know, these young people making a lot of money, you can be replaced very easily if you start, if you start sort of missing your free throws, picking bad stocks. Right. We had the brokers where we were their clients with like the Goldman Sachs would

take us to like the Kentucky Derby, hang out in the 10 or the Super Bowl. One of our traders is playing like flag football with Michael Vic at the Super Bowl. Like those really yeah, yeah, those really need opportunities in your 20s to have those trips, but also a lot of pressure to perform. How long were you there before something tragically went wrong? That's what to phrase it. Yeah. So at my first firm, it closed around the dot-com crash, 2002, 2003. I shredded my own account for other firms for a few years. And I finally got my second job in 2006, where I was hired as a junior partner by a senior partner who was starting a hedge fund. his seed capital came from a legendary value investor named Julian Robertson, which is called Tiger Management.

So back in the day, the two biggest names in hedge funds were Julian Robertson and George Soros, which has a different connotation today. But those were the biggest names at the time. And so this guy was my mentor, probably 20 years older than me and said, hey, Julian Robertson's giving me money. I'd love for you to be my junior partner. So now I'm 28. I mean, anybody at Wharton in my class would have loved to have this opportunity. So now I'm in this position to potentially make a bunch of money because now I've gone for being an analyst to actually being a partner. So having a piece of the equity.

But around the mid-2000s now, I also become aware that illegal insider trading is going on. And I get to find that too because people hear the term insider trading. What is it? And so insider trading is buying or selling stocks on information that's material, non-public. And then you get because somebody breached their duty to their client or the company. So materiality would be, if the information was public, it would move the stock price. Non-public, public is obviously pretty clear. And so an example would be, I'm from a small town of New Jersey.

If I talked to the Starbucks there and said, how did your sales go this quarter? And he tells me the exact information, I can't trade Starbucks stock because it's one store in New Jersey. If I fly to Seattle, play golf with Howard Schultz and say, Howard, what revenue and what earnings did you make last quarter? And he tells me, I can trade the stock long or short. because Wall Street has estimates that they're expecting these companies to either beat or miss. And so if you know that the company is going to beat those estimates or miss those estimates, you could be long to stock if they're going to beat the estimates or short the stock if you're going to miss. So that's kind of what's illegal inside information.

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You start working for this company. Yeah. And how, like, and I'm assuming everything's going okay. Like, how long does that happen before? Right. And you understand that you're now starting to realize, like, people are, there's insider trading going on that, and like, I know you had sold said, uh, on the other podcast that, like, there were basically, there were some firms out. out there where it was almost known that this is their business model. Yes.

These guys go kind of like the, have you ever seen Wolf of Wall Street? Yes. It's got to make it. Okay. Yeah. You know, the Bud Fox character, right? The Charlie Sheen plays him, the young kid. Oh, the Wall Street movie from the 80s.

Yeah, from the 80s. Yeah, yeah, yeah, because that's a great example, right? Yeah, Wolf of Wall Street. Yeah, yeah, yeah. I've seen Wolf of Wall Street. I haven't seen whatever you're talking about. Oh, yeah, yeah, yeah. Right, again, this is back in the 80s.

Yeah, yeah. Did I say, I said, I said Wolf? Yeah, yeah. Oh, man, I'm sorry, just Wall Street. So Wall Street, the first movie, which was the Bud Fox is the main guy played by Charlie Sheen when he was young before he went crazy. And so, and, ooh, Gordon Gecko is the main guy, right? Or Gordon Gecko is his boss. But basically, Gordon Gecko gets his, like your story so reminds me of this, where Gordon Gecko manages a hedge funder's own money.

I think he manages probably a huge hedge fund, right? I think at the time there's like a hedge funder, institutional money, it's clients money. And what he's doing is he's buying companies and then he's buying them and bankrupting them or whatever, and he's selling off the companies, he's longing stock, shorting stock, whatever. He's investing money, right? But he gets this one guy kid named Bud Fox, and Bud Fox is a stockbroker who's desperately trying to kind of land him as a client. And so he lands him as a client, but Gecko starts telling him like, look, I need winners. not sometimes, not an average of you being a winner, picking winning stock.

I need winning stock tips every single time you come to me. And if you have to go out and get that, you know, by insider trading or whatever, he's looking, that's what you have to do to work with me. If not, kick rocks. And, you know, Butterfox is making, whatever, 50,000 a year, 30 years ago, probably 100, the equivalent of 150, he's living in a fucking shitty, you know, little tiny efficiency. he's and he just kind of buckles he's like fuck he's like that's insider trading he's like but I'll do whatever I have to do and I always love not to sorry not to go off that but he actually

comes up with an ingenious thing he ends up buying into a cleaning company that cleans all of these law firms that represent these huge companies so he can basically go into the law firms at night and pilfer their files and find out what's going on get that information and use it so that's one of the ways he does it, obviously. Yeah. Great, great movie. But he gets in huge trouble, obviously. He blows up.

He's doing amazing stuff. Start Dave Daryl Hannah, which is really hot then. It gets a huge condo and ends up, it all ends up coming, you know, coming down, you know, all around him. And, but great, it'd be great for the, like, if you watch that movie, it'd be great for the hook in this. There's an arrest scene. There's Gecko. I'm telling there's all these great Wall Street scenes. I mean, it's perfect.

Yeah. And the first sort of insider-turning arrest in the real industry happened in the 80s and 90s with Michael Milken was a big name, Ivan Borski. And so insider trading prosecution picked up then. So, yeah, so now in the mid-2000s, I know what's going on. I know my competition is doing it. I never felt I'd be in the position to get that information because usually you had to have contacts inside these Silicon Valley companies, these tech stocks who were leaking information. And so what some hedge funds do who had it as their business model was they would hire a stock analyst from a Yahoo or a Microsoft. or a Cisco who could call back to their contacts at the company and say, hey, either what companies are you going to buy because we'll buy those stocks or here's what Wall Street is thinking you're going to have for this quarter for their earnings, what are you actually going to do? And so I didn't have those connections. I was just good really go with Excel, valuing companies, picking my Google and my yellow page ideas, but that was going to be long term. At my second firm, we lost money the first quarter of investing, which shouldn't have mattered because we were investing over a one to three year horizon.

All right. Now, one of the pivotal moments is my boss came into my office after that first quarter, he said, I know we're investing longer term, Tom, but we just lost money in the first quarter. We're a small startup. You know, he's sweating. He's like, we've got to start looking for opportunities to make money every month, or we may not survive. Now, when any goal in any business goes from one to three years to monthly, the opportunity to start cutting corners certainly increases. And it also say, for a lot of industries, it's like that ambiguous message from the boss to just do. what it takes. Right. And me as the young employee not asking clarifying questions, do we mean anything goes or am I going to start to dig into what we know the competition is doing? Like, I didn't ask anything. I just assumed, all right, if I was to get inside information, I'll probably do it because he said anything goes. So only a few more months after he's in my office, I get a phone call from a woman who worked for a guy named Raj Raj Raj Rajaratum. So people look him up. He's probably one of the most famous guys we talked about who's later charged for insider trading and i think he was sentenced to 11 years later she worked for him and so i knew her through the industry as i know other

analysts at this time we talked about stock ideas i suspected she was probably insider trading but she so the way it works is like you wouldn't give me an insider stock tip unless you knew that i could give you something back like a quit pro quo right or reciprocation otherwise why would you share the information with me. It's like, oh, because you're my friend. Like, there's probably some back and forth. That's how it happened. So she calls me and she says, Tom, you know, you'd made me a lot of money over the last few years on these great ideas, these longer term ideas I mentioned that I was working on. She's like, I've got something for you, but you have to promise me you can't tell anybody. Now that should have stood off a red flag, right? Or at least

a yellow flag, like, okay, but I'm now intrigued. Like, what is it? She's like, okay, so a Moody's analyst, so not to get too technical, but they rate corporate bonds, Moody's, who was roommates with her cousin, Moody's and S&P, it's a duopoly. So if a company is issuing a bond to raise money. No, no, I know who Moody's is, but then there's what there's another company to that's that people, S&P, Moody's and S&P are the two companies? Man, I think. Like, I feel like, are they the ones that also like in the mortgage, during the mortgage crisis was they were given like, people the triple a ratings for so yeah actually it was probably moody's i mean look it up but but they rate bonds and so it was probably actually yeah that i was going to say that's what one of the

reasons it it because i remember they were they were one of the companies that when they were having these you know these what was the i forget what they called them the tranches of bonds yeah for the for the mortgages were going and say oh this is triple a and they're like and they weren't triple a but you know the mortgage back security is the nbs yeah yeah exactly that caused all the crisis no eight no nine so yeah so moody's and An analyst at this company who was roommates with her cousin told him who told her that one of their clients, Kronos, was tech stock, was going to be acquired in a few weeks. Here's the date.

Here's the price. Here's the private equity firm. Very specific information. Up to this point, I knew her to be kind of a rumor monger. There's a lot of rumors go on the stock market. Oh, this is happening. Most of the time it's BS, but it sounds like very explicit information. When I speak at a college today, I say imagine the answer.

to the test just fell in your lap. Like, this sounds like this is going to happen. Why? So I'll get to it later. Yeah, so she shares it with me. And at first, I'm thinking she's doing this because we're friends. She's known me for years. I have made her money on these longer term ideas.

Maybe she's paying me back. And we had talked about it, even with my boss, that, like, we know insider training is going on. And so, like, oh, my God, now I'm actually in possession of information. I still had a moral accomplice. I'm like, all right, well, I don't do this. but later that day I'm talking to a friend at another firm he's at what's called a prop trading firm so you eat what you kill if you're down that month you're not getting paid if you're up you get your

percent he's down that month we're talking and we talk once a month not a close friend he's like dude are you hearing anything out there I could trade I'm down and I'm like bro I'm not trading this but just so you know this woman I know just call me and told me this moody's analyst told her this company chronos is going to be acquired in a few weeks so just pausing right there I could be charged by the SEC, the market police for tipping this information. And I haven't traded yet. And now I have no idea what he's going to do with it. Within an hour, he tells another guy at his firm who apparently buys 500,000 shares of chronos and call options. So call options is like a leverage bet on the stock. So if the stock goes up 20%, you might make 100, 200% on the stock.

And so he's doing it. The woman that called me, she has her entire brokerage account. She told me in the stock for this event, which probably wasn't smart. So I still haven't traded yet, but I'm starting to get, I think, Matt, like a little like FOMO, like, fuck, I got this information. Right. She's going to make millions. This guy's going to make millions. This guy he told is going to make a lot of money.

But I'm still holding out until he calls me back. He says, dude, did you buy some? Like, we are all in. Everybody here is in. And there's this thing. One conversation, just one brief conversation, you know? Yeah. And so there's this thing, the fraud triangle, when the employee crosses,

that line, there's the opportunity, the need to do it, and the rationalization. Right. So the need was there for the short-term performance. The opportunity for me to do this was, I'm the junior partner. I can buy a stock in our portfolio and not even have to talk to the boss, as long as less than 1% of the assets we manage for clients. So if we manage $100 million, I could buy a $99,000 position in the stock. So it's like, this is an idea I'm working on.

It's a new idea. I'm going to do some more research. So I calculate and buy a 0.9% position in the portfolio. And I'm sure you know, I rationalized it. Like I said, well, these other guys are making millions. I'll just buy a small amount just to play along. Right. Just to take some breadcrumbs off the table.

I felt it was like dropping a rock in the Grand Canyon. Like if this would ever be flagged by the SEC, I'm the last guy they would look at because these guys are making millions. Right. If this plays out, it'll help us a little bit. And it'll help the short-term performance my boss wants. I said, who am I hurting? Nobody was going to say nobody's getting, nobody's getting hurt.

Nobody's getting hurt. It's about people, people, people have people. Exactly. It's just, you know, I'm just buying it before everybody else realizes what's going on. With insider trading, it's easy to rationalize victim was crime. As you said, it's not like a Ponzi where you're giving me money and I'm spending it on something else or giving it to somebody else. Like, just buying it before everybody else. I said, I'm just taking a flyer.

So I'm using a euphemism for the conduct. So I didn't say I'm insider trading. I'm like, taking a flyer is a small position. that's like taking a small position, a flyer. Right. So I'm starting to sort of distance myself psychologically. Like, I'll just, and I said, I'll just do it this one time. It's never just once.

Yeah, yeah. And so all these sort of, the rationalizations happen as they do with a lot of people. And I thought, you know what? I really have no idea who she's talking to. She could be full of shit. I don't know who she's talking to. I'll do it one time. So extremely poor self-talk is it often as in these situations.

Right. But I also say, I think in my corporate talks today, I talk about the idea of like making a decision in isolation. I didn't talk to my boss. I certainly didn't talk to compliance. I didn't talk to anybody at my firm. I made the decision on my own to cross that line. I didn't ask any clarifying questions. Can we do this or not? And so I realized, and the way I quaid this in my head and people, I'm sure will disagree. I'm like, my whole life, I've broken laws. Like, I speed in college. I did Napster. Like, I know it's not the same thing, but it's like, well, I know it's illegal, but I'm just doing it a little bit. So that rationalization is really spiraling.

So, longer story short, a few weeks later, the stock has halted before the market opens, which means news is coming, and then word for word, exactly what she told me. So at first, I'm not, maybe it's a rumor. Maybe something happened. The stock is up 30%. And I hate to say it. Like, I didn't freak out. I got an adrenaline spike in me, like uncontrollable subconscious adrenaline.

Like, now I'm part of this illicit end group. And I think for me, why did I do it? Looking back, I'm like, I was very not secure in myself in my 20s. Like, I was always worried these guys are cheating to get ahead. Like, I was drowning in insecurity, I think. And now I was part of that illicit in group. And the next conference I could attend with these guys, I was like, hey, I had Crohnus. Right.

And these guys were like, they were even like, Tom, you do real work. We don't, you don't do what we do. I'm like, I know about the next one coming up. Right. And so one of the older guys put his arm around me. He's like, now you're one of us. So I think, like, a lot of it is just not. Oh, that's all so sinister.

Yeah. It's just like, now I'm part of this group. right and now i have some status now i can like puffery like now i can stick my chest out hey tom's in the no yeah and looking back now i'm like that's so much of what it was it's stupid but like that's it's funny because we what we we talked about before um before we started was it was this to me it was whiting out that 30 day late and then being concerned the whole time up to up you know sending in the file yeah three four days later they get the file they review it and then they came back when they come back and they said you're clear to close it was like oh my god i got away with like

they didn't catch it yeah and then when it closed you know and everybody signed and they funded the loan i and i always remember because initially i was it was that i'm just going to do this one thing my rationalization rationalization was this is a single mother yes she needs the mortgage she her her her son i'm doing her a favor yeah nobody's getting her she's going to pay you something the whole thing and then when I worked I became emboldened by it and so when like I said when the next guy came in and needed his W-2 changed or something and he could get the loan right I was all in yeah because you're right that that oh my God this worked and nobody kicked in the door yeah they didn't arrest me everything's she's happy I'm happy

this is this is okay this is how it's done yes and I think you get desensitized to it like I had some, it took a few weeks for this deal to happen. I was sort of thinking about it. When it happened and when the guys are like, yeah, you're one of us, it becomes very easy to do it again. Like, once you do it once, doing it again, I'm not even, so it's up, so it's up 30%. My boss and I are meeting to go through our stock portfolio. My boss sees it. He skips over it. Usually every stock, what do you know, should we buy themselves on? Like, what have you learned? Like, he sees it. He doesn't even ask me questions. So to fuel this rationalization further, here's my minimum. mentor, he's not even asking me about it. Hey, it's okay. So if this happens again, you know,

he could have fired me and said, we don't do this here. What the hell? Right. And so that again fuels the rationalization. If he had asked you, what's going on like this trade? Like, wow, what a great trade. How did you think of something? And I don't know. I was just like, did you already have something in your mind. I didn't have anything really planned. Right. Because I probably would have told him, hey, she called me because he knows it's going on to you and kind of figured out how he felt. And so he didn't even want to, yeah, he didn't want to know. So he wanted to be sort of the ostrich which is head in the sand, the boss that says, don't tell me about your short-term performance, okay, which is not good. I get back to my desk and my phone rings, and it's this

woman who would tip me. She's like, did you see it? I'm like, yeah, I saw it. She's like, I hope you load it up. I'm like, well, I bought a little bit. I took a flyer. She's like, oh, I'm going to make millions on this. And oh, by the way, Tom, that Moody's analyst, yeah, he, I gave him your name. Could you just take care of him? Could you write him a check for $10,000? Because he's going to have more of these. And you can imagine when I said, holy shit, what, like, you gave him my name? He knows who I am. I'm supposed to, like, I'm not part of this. So he's going to be in New York next week. Can you give him a check for $10,000? I'm like, all right, I'm not writing him a check because that's illegal. Yeah. Well, I was going to say, like, first of all, like, why would

you expect me? Like, we didn't discuss this. Am I trapped? Yeah. Yeah. Like, why am I writing people checks now? No, no, no, no. We had a conversation. Yeah. You know, like, why am I writing a check? You should have mentioned that up front. Yeah, exactly. That should have been part of this. Right. Or I could have said no end of the relationship there. Like, I'm not.

No, this is done. You're crazy. So I'm like, all right, let me figure it out. He's going to have more. So I call the buddy that I tipped at that firm where they made millions and I looked at the situation. Could you maybe like get cash together? And he's like, oh, yeah, no problem. Yeah.

So he gives me a FedEx envelope. So we're at Grand Central, very clandestine. Like, he slides the FedEx envelope over to me downstairs. I walk out. This guy in the corner of the street says, are you, Tom? So you're slipping him. cash. Well, he's slipping me. So he gets the $10,000 together from his firm in cash. He's like, lets me to Grand Central to do the exchange, you know, two knuckleheads in Grand Central. And he's

sliding me to FedEx envelope with cash over, not saying anything. Like, we made it really theatric. I don't know why. This just went from an innocent phone call, well, not really involved to super, super, like, you know what I'm saying? Yeah. Underworld kind of. Yeah, it's very theatrical. You know, like that. Like, who's watching? Like, nobody's watching. It's in the newspaper I'm walking away. Yeah, but it was almost, so with the FedEx envelope.

And I know that this young, 22-year-old guy named, I think his name was Deep Shaw, young Indian guy, is going to be in the corner of the street. And I see it out of the corner of my eye, he's like, are you, Tom? I just hold it up. I don't even look at them because I'm so disgusted with myself at this point. And one of my test now, my ethics journey is like, if you can't tell your grandmother what you're doing, you probably shouldn't do it. Right.

So, but I'm like, let me go take a shower. Oh, it's just this one time, too. So I'm not, like, but I went the other way. The disgust disappeared immediately. I was all in. Oh, yeah, it was, I was, you know, my, it was completely, now I know the truth. I felt that maybe that afternoon doing it. And then she calls again.

And so it would happen again. The third tip in trade was that Hilton Hotels was going to be acquired by Blackstone. And so we're a tech stock focused hedge fund. I'm buying shares of Hilton Hotels. Way out of that. Way out. Yeah, yeah. And so what actually sets off the SEC investigation later was like 10 technology stock hedge funds by Hilton.

So if you want to see, if you're going to serve it up on the platter for the SEC, that's one thing you could do. And so the third tip and trade of the four was another tip. Another source of information she had was an investor relations firm where an employee knew the quarterly information for Google. Are you still given money? So I didn't do it in the second one. I said, I'm not doing this again. On the third one, she's like, I have a new source. This person wants $15,000, and I want to pay her.

So I do the same thing with my buddy. The problem is I have to get it to California. And so I'm going to go out there. I'm going to a conference anyways for tech stocks. I'm going there anyways. I'm like, I'll meet you there, but I have to get it through LaGuardia. So I'm going to LaGuardia Airport in New York. I have $15,000 talk about like going from one innocent phone call to having it, like,

you put something down your shirt and your pocket. pockets and your socks. Now it's before the machines that we have today. I walked through it doesn't go off. I don't know. I didn't go off. I went to the restroom. I put it back in the bank envelopes. I'm like, all right, let me just go on the plane. It's 2007. So I guess there was still TSA would eventually, you know, was still checking people as they walked on the flights just because 9-11 was six years before. And so they're stopping people randomly. Can we just search your carry-ons? And I saw that. I thought they're there for me. Like, why else would they be doing this? I must have been on the cameras in here or something. Oh, shit. When am I'm going to

say. And so I don't make eye contact. Group three is called the board. That's my group. I'm walking on. They're like, sir, could we see your carry on? And so the woman, the female TSA agent takes it. And I didn't have, I had my laptop. And I had $15,000 in cash in there. And she looks at the other guy and she's like, have a nice flight. Didn't say anything. Right. I didn't know until years later, it's domestically, you can actually carry whatever you want. And I was going to say, I'm going to San Francisco, but I'm going to Vegas later, and then bringing the cash. Yeah, yeah. And I think it would have been fine, but they want to, but I thought it was illegal.

So I guess better story. So I sat on the plane. And then that, that was my own shit moment. Like, I am never, so I got to California, gave it her, I'm like, I have never paying cash for this stuff again. You won't believe what happened. I almost, I think I almost got caught, but they didn't say anything. And she's like, all right, all right, right, no more cash payoffs.

And so it was four trades like this. Two of them were the cash payoffs. You're not cut out for this. No, exactly. I'm sorry. I just, yeah, no, it's not, it's not my line of work. So I'm like, I'm done doing this. He's like, there's one more.

I'll give it to you. It's coming up. Another deal. No cash payoffs. I'll take care of them. All right. So four trades, they were all these small positions. So I never escalated it.

So my boss is looking at the other way. I could have, like, bought a lot more. I kept it at 0.9% because he wasn't saying anything. We made a million dollars for our investors on the four trades. We managed $100 million, so like 1%. So we were up. up 30% without the trades. We're up 31%.

So what's the point of even doing it? It's so stupid. I'm not swinging for the fences. Like, I'm just doing it to play along. I know I'm in the end group. Yeah, I was going to say,

it's like, it's like shoplifting when you've, you've got the cash. Like, you know, I'm about to buy $150 worth of groceries, and I'm going to go ahead and take the snickers and slip it in my pocket. It's like, what are you doing? What are you doing?

Yeah. It's a $2. Like, you throw it on the counter. Right. Exactly. Why do it? And up the million dollars. So my personal take from the crime, which is actually shocking, like, I guess at 29 years

old, what was my price of professional suicide? It's $46,000. That's all I made, $46,000. And when I speak today, there's a professor friend of mine and I speak at the school. He's like, let's calculate how much future income you give up. I'm like, please don't do that. He's like, I want to show the class. And he gets to like $23 million, whether it was my future.

your income. So he's like, Tom, I'm like, thanks for rubbing it. But it makes a good point for the students. Like you, what's, what's the point, right? Well, it's, you know, what's funny is I hate to compare you, compare it to this, but it, but it is a comparison. For guys to go to in prison, it's like, you talk to the drug dealer who, oh, man, I was making, you know, whatever. And honestly, this is probably high for drug dealers. I was making $30,000, $40,000 a month. And you're like, okay, so how long did you do that? Oh, I did it for two years. Okay. And how wanted you go to prison? And then you add in the 10 years they did in prison, then you defied it. And it's like, you were making minimum wage, bro. You would have been better off being free

that whole time and working at McDonald's. But at the time, it doesn't feel like that. And nobody really thinks they're going to get caught. That's the thing. I never consider the idea of ever being caught, which is pretty clear. I'm not trying to cover it up. I don't even have cover stories. What would I say? And I'm not thinking about, to your point, the money I'm making on the crime. Which when I taught today, people are like, you weren't thinking about the money. I'm like, no, I made $46,000. I never thought I'd be caught. And at the end of 2007, this woman called me. She's like, oh, my God, the SEC has contacted me about that Hilton trade. As we said, it really sticks out if you're trading tech stocks. I'm going to tell them I bought Hilton because Paris Hilton's in the news. Now, I know I'm dealing with an idiot.

So another expletive tirade from me. What do you, what, but I thought, holy shit, if they're talking to her, I'm probably going to get that phone call. Now, I better have a reason why I bought these stocks. So let me go make up a reason. now, months later, why I bought these stocks. And I found random reasons. Like, there was a brokerage firm that said hotel stocks are cheap. Oh, that's why I bought, you know, I'm back getting it. There was an article. Yeah. Whatever. And I had heard from other guys I knew that were chart inquiries from the SEC. They're like, just called them back and say some shit about, like, there was an article in the Wall Street Journal. They just want something from the file. Yeah, exactly. And you didn't make enough for it to be a massive amount. Yeah, maybe they'll call

me, but like, I'm prepared. I have my four reasons. And so sort of like, you know, once you like that match, you can't unlike the match. So I can't take the trades away. So I can only try to put that match out. So I'm making this plan. And so I had this plan in place if the phone were to ring from the SEC. But as you know, like Mike Tyson says, everybody has a plan. Yeah, to get punched in the mouth.

That's right. That's right. So the SEC doesn't call you just so people know and say, Tom, could you call us back about all that insider trading you did last year? Right. Instead, it's July 8, 2008, middle of the financial crisis, 630 in the morning. I'm living in Manhattan, leaving my apartment to go to the office. I have some dry cleaning to drop off, so I'm going to go drop off this dry cleaning. Before you get to that, can you mention that we talked about the, I forget her name.

Yeah, Remy Kahn. Remy Kahn, yeah. And by the way, you know, I also to interrupt, the Raj thing, and Remy, I think was interviewed on that was like 2020. I remember being in prison. The new BMO ViPorter MasterCard is your ticket to more, more perks, more points, more flights, more of all the things you want in a travel rewards card, and then some. Get your ticket to more with the new BMO ViPorter MasterCard and get up to $2,400 in value in your first 13 months. Terms and conditions apply. Visit BMO.com slash VIPorter to learn more.

watching like a 20-20 or 60-minute thing on him and her. Was it on her? 60 minutes. Yeah, yeah. And she's talking about how it worked and the whole thing. So that was 2016. She was on 60 minutes. Okay.

Yeah, that's right. So that's the woman that was 60 minutes. And so, yeah, so the last trade, so she calls me in December of 07, the SEC has contacted me, Paris Hilton. I told him, oh, my God. That's terrible. Because Paris is in the board room saying, this is what we're doing, fellas. Yeah, exactly. We're going to get taken by Blackstone.

She's working a deal, right? So then we go to June of 2008, and she's like, Tom, I'm going to be in New York. We need to meet because I want to figure out, like, what I should tell the SEC. I'm going to meet with the more. Like, what, what should I say? I'm like, all right, let's meet. And I'm trying to figure out cover stories I can tell her for these trades. We meet at a coffee shop by, what was it, Rock Center there where the ice skating rink is outside there in Manhattan.

So summer, so nobody's ice skating. So we sit down. And she's like, all right, this is what I'm thinking about saying. What do you think we should say? Like, what do you think I should say, Tom? I said, well, here's this report that said hotels were cheap. And she's like, but you know, this was illegal insider trading, right? I'm like, yeah, I know.

It was illegal insider trading. Now, for you, that's enough. That's what? Yeah, exactly. But you realize. Right, right. Talking to the plant. Yeah.

Let's put the plan here. So I'm like, yes, I know that. She's okay. But it's not setting off alarm bells for me. Very. No street smart. So she's like, all right, great meeting. She's thinking great meaning.

So good talk. Yeah, good talk. Good talk. Good thing. So this is what we'll do. Thank you, Tom. And then a week later, the guy that I had tipped at the prop trading firm says, bro, we need to get coffee.

And so we get coffee to Starbucks. We sit really close. I'm like, I guess it's New York City, so it's close or whatever. And he's like, these trades have been weighing on me that we made last year. Like, what would you say? And I didn't put it together. I was just like, this is what I would say. This is actually what I'm going to say.

I just told him when I told her. And he's like, but this was illegal. inside her trade. Oh, my God. I'm like, yeah, I could have just grabbed. Yeah. I'm here. So, so they were wired up. So the woman that called me wearing a wire, you know, the guy that I tip was wearing a wire. So those are my two points. So July 2008, I'm dropping off my dry cleaning out a week after seeing him. This guy on the sidewalk in Manhattan says, are you, Tom, I turn around, the wallets are out. So I actually knew what this was at this point. We sit down at a Wendy's. The wallets are.

You mean that they flashed their credentials? Yeah, a man and female agent wallets out, the dark suits. Can you come sit down with us? So there's a Wendy's there in Midtown. He's look, look, man, we know about your four trades. Can I ask you another question? When they do the boom, how do you feel? Because when we were talking earlier, I was like, oh, my God.

No, my face went white. My stomach's turning. Because it was just had a gut punch, right? You didn't see that coming. And I was expecting a phone call from the SEC. I wasn't expecting law enforcement to be involved in this. This was like a regulatory thing, if anything. So it's, oh, my God, law enforcement, the FBI.

And so just like face goes white, like this whole world just comes crumbling down. Let's sit down at this Wendy's. So the male agent, it's sort of like they were playing good, good, cop, bad cop. He was the bad one. So we know about your four trades. We know that you were just down in Atlanta visiting your baby nephew last week for his baptism. And he knew his name. So my head's spinning at this point.

It's sort of like that old Charlie Brown cartoon where the teacher's going, well, wah, well, why. That's all I sort of phase out. And I thought my first thought was, oh, my God, you know, my parents are going to kill me. What are they going to say? That's my first thought, yeah, they're going to be disappointed. And I thought, holy shit, my wife's going to leave me. We just got married. She didn't even know about these trades.

Like, I didn't tell her she's going to leave me, which always happens. And then I thought, oh, my God, this might impact my career. Oh, my God, I'm going to prison. So it goes from dad to prison. I start making implicating statements. Yes, I made those four trades. In fact, these cash payoffs, and he's like, go on. Cash pay, did you say?

Yeah. I said at LaGuardia Airport, this guy on the street. And the FBI was like, oh. And so he gets his pen out. He's like, go on, go on. I didn't say, prove it. Prove you have something on me. And they probably could have played those recordings from previous weeks.

But I just, and it's maybe people have an issue with this. I just thought, like, the right decisions to start making that would be to just confess everything which again I tell people I always talk to an attorney right I just start confessing to the FBI and they're like all right let's just calm here like pause here Tom we got some water for you take a sip of water and they're like are you aware of this is going on and the industry do you think it does I'm like guys it's rampantly going on like how do you think I got involved like this is everybody's doing it and they said we think that you can help us out and but they didn't tell me who would cooperate on me but I kind of figured it out so I was saying like how do I even

and help out and understand. They're like, are you where it's going on? And I said, yes. And they, like, pulled out this web of names of the tipping charts with the circles and the arrows. The insider trading cases, they always present these, this guy called this guy with arrows and circles. And this is the big web we're trying to take down. Right. So there's two big targets at the top.

I assume one of those guys is Raj Raj Rajaratnam, the Sri Lankan billionaire. He folded it up. He gives me his card. He's like, right now, you have the opportunity to help us with these cases. It's going to help you. Then I said, should I talk to? an attorney and the FBI said, we'll let you know when you can do that. We can give you some guidance on that. So, so it like, first, they're not supposed to say that. They're not, you know what

saying? And the moment you even say attorney, they're supposed to go, well, if you want to talk to an attorney, by all means, have them, like, they're supposed to stop everything at that point. You even talk about an attorney. Right. Or getting an attorney. They're not supposed to persuade you to not get an attorney or suggest it or. Yeah. Sorry. So yeah, yeah. So I took his card. I didn't say I was going to help him out because I was like what does help mean that was a Tuesday morning they're like you can't only tell your wife you can't tell anybody else so I'm going to do that she's going to leave me she was working at Lehman brothers so that was the one that went under in 2008 so she's under all this stress it's 2008 she's having a horrible time at work

which is in the process of going under at this yeah exactly so it hadn't under yet Tuesday I get to work late my boss is like where were you like ah just rough morning my face is white but it's 2008 so my face was white every day the market's crashing first worst stockmark in 75 years. I'm like, I've got to talk to somebody. And for marriage, I converted to Catholicism. My wife's about Catholic. And I'm like, you know what?

I should go to St. Patrick's and confess everything. I just did it to the FBI. I should talk to a priest. So after lunch, I walked to St. Patrick's, the line is long. I'm like, do I know some of these guys? Are these guys in the manufacturing industry? And so I get to the confession. I tell him everything.

He's probably like, all right, get to whatever. By the way, this morning, FBI approached me about insider training. I did it. I just threw it in there. He's like, what? And he's like, the FBI approached me. They said I can help them out. And he's like, Tom, it sounds like your whole life.

You played by the rules 1% of the time you didn't. If the FBI has given you a chance to clean up the industry, you should do it. Now I should have talked to an attorney. But the priest, I don't know if I was suicidal, but it was my lowest point. And the priest sort of planted the seed. And the way I think about it, my penance was like to help the FBI. But then I had to tell my wife, too, and I waited until Friday. I went to work before she woke up.

I got home after she went to bed. I didn't want to see her. And I didn't want to have to tell her. Yeah. So Friday, I have to work. Young couple in Manhattan. How was your week? And I'm like, before you tell me,

they're like this Lehman Brother's story, I have to tell you something that happened this week. It's pretty major. And so I'm usually like, you know, fun making jokes. And she's like, all right. I'm like, you have to sit down. And I think she was probably thinking, oh, he's going to leave me or something. And so I said Tuesday morning, the FBI was in my face about this insider trading.

I did. And she was like, she paused forever. Can you say that again? That's not what I was expecting. acting. I said it again. She pauses again. She's like, well, you didn't do anything to hurt me. If the FBI has given you a chance to clean up the industry, which you always told me was corrupt, you should do it. Now you know that in our situation, like 85% of marriages end, like in this situation. And so she stayed with me, which at this point. So she's telling me I should do it.

So I called the FBI. Well, so I was going to say first two things. Sorry, real quick. One, it's funny because I was talking to my wife about this. And for example, I went to Vegas and talked to a guy, spent a couple hours with a guy in Vegas a few months ago who was actually about to go to be sentenced for a white collar and he was going to go to prison. And, of course, he's, you know, concerned about his wife, his kids, the whole thing. And, you know, I was talking to my wife and I was saying that the only people that I knew that where their wives stayed with them.

were guys that were very well off and could maintain their wife's position, right? Okay. And so if they went to prison for five years, the wife stayed with them. They got a couple kids. They own their house. They still are worth $12 million. He can continue to make, she can maintain her lifestyle for the next few years. Right.

They stay. Or women that were, women that are like from another country. They're south. They're citizens, but they're South American. They were born where you get married. You stay together no matter what. And other than that, I know, and I can't, I'm sure I probably know of one or two that are out there, but almost none of the wives stay more than a few years, you know. Like they didn't sign up for this.

No, exactly. I got two kids I'm raising or I got a kid I'm raising. I didn't sign up for this. I'm being patted down by a guard every two weeks to come see you and have to wait an hour and a half. Yeah. Like so and then when I heard that statistic to the 85% I would remember saying I was like oh that's absolutely and the 15% I'm sure those are people that still have money or they're because and so the fact that your wife because I will listen to the whole thing you know the story you had told in the podcast what was the guy's podcast? Jordan Harbinger. Jordan Hardinger.

Harbinger. Yeah. He sounds super familiar. Yeah. That's a that's a great statistic like it's so true because you know it's it's horrific. And she had every right to leave. I mean, at that point, like, we just got married with no kids. And I'm not the guy.

Like, this is, you're not the person. Like, I get it. It seems, it does seem, in some ways, it's unfair. But it's like, wait a second. You represented a guy. You know, you're clearly not the person that I thought you was, you know. I trusted you. You're doing this thing.

You know, you're jeopardizing our marriage, our life together. You're our future. Yeah. So I can, I can see that. Like, I don't. That was one thing I wanted to mention. The other thing is you. mentioning the FBI.

The other thing is funny. It's funny that, of course, the priest, you, and your wife. The problem is all of you, with the exception of the insider trading thing, are law-abiding citizens who've watched too much law and order, and they think that the authorities are always going to work in their best interest. And cooperating is the right thing to do. And I'm not saying cooperating is not the right thing to do. sometimes it's it's sometimes it's not but for the most part most of the time it is yeah but without a

lawyer you know you don't get the best deal right and you can get a deal where like I know people that cooperated and it's like I know guys that went out I got a lawyer it's like you you ran a Ponzi scheme I know a guy who ran a Ponzi scheme lost a million dollars stole from his friends and family lost a million dollars I mean a clear Ponzi scheme didn't invest any of it gets It doesn't get indicted. Basically, all these people get together. They contact the FBI. FBI contacts you as attorney.

FBI comes out and talk to the guy. The guy gets up, hires an attorney, probably with the stolen money, and goes in and talks to the, I mean, absolutely 100% clear. And this went on, by the way, for a year. Like, he's lying. He's making fake bank statements, fake investment accounts, he's faking everything. Yeah. On a 4x, you know, scam where he's saying he's investing money into 4X, which he wasn't.

And he goes in. He talks to the U.S. attorney. His attorney goes in, talks to the U.S. attorney with him, and he never gets indicted. They do what's called a pretrial intervention. You pay back the money. We're going to put you on probation for like four years. And in the process of this, well, not, it's kind of like probation. They never indict him.

He never gets a felony or anything. He just has to pay back the million dollars that they say he owes. And you know how he did that? He started another Ponzi team. Yeah. And use that money to pay this back and never gets indicted for that. So there are multiple accounts where I know of guys that cooperated. And with a good attorney, they went in and they said, look, this is what's happening.

He's a good guy. He made a mistake. Let's let him cooperate against the people that are bad guys. And let's keep him from being indicted. And they've done that. And then they never get indicted. In my case, when I first got arrested, I went to my attorney, he was like, you haven't been indicted yet. If you go and turn over like five of your brokers, and this is my first case.

by the way, because I've had a couple cases. The second case, I cooperated. Right. Because I realized then that's just stupid. Yeah. Well, the first case, my lawyer said, go get like 10 files, 10 of the most egregious, fraudulent files you have to five or six of your brokers, bring them in, cooperate with the FBI, we'll get them indicted, and I can keep you from being indicted at all. Yeah.

And of course, I said, I'm not going to do that. I thought it was a fucking gangster. Right. And I didn't do it. You know, in retrospect, I should have, because they all cooperated against me. and I didn't realize that that's really just the smartest thing to do is to, it's just immediately in a lot of cases, if you could realize people are getting busted around you, the smartest thing is to go to the FBI first, because I know it's coming down my way.

Let me come in, work out a deal with an attorney. I'll cooperate. I don't need to be indicted. Right. That happens. But, you know, you, your family, the priest, everybody's like, no, cooperate. You don't need a lawyer. Do the right thing.

They'll look out for you. And the truth is, they're just not always looking out for you. No, that's right. And I don't know. We can't ever play it back like the what if I would have said, okay, I'll help you out. But we have to make an PROS dealer or something. Right. It's hard to play that back.

We don't know. You don't know. But you don't know in general. You're just a normal person like the, right. I just want to fix what I did and you think it'll be okay. And ultimately it is. But you're just honestly, mostly because you're just a smart guy. You're going to figure a way to make the best of a bad situation.

Right. So, yeah, I told her and she took it as well as she could. And the FBI, I think they had even been. following me and profiled me like this guy will probably flip like they even told me later like like you go home straight to your wife you don't have anything on the side i'm like no i'm a faithful right and they're like oh that's that's sort of more upstanding than like the average wall street guy i'm like so let's go to her she's like i think you should do it and so monday i called the fbi i didn't talk to an attorney still i said i know what's going on i'm like but how do i

help like you know i think the woman wore a wire on me i'm pretty sure i had that weird conversation with the friend like who do i even help they're like let's have lunch like who do you think are the worst actors? So it's very rare for an informant to have sort of this open playing field. Like how do you, can you help this out? Like, I'm like, well, here are the worst actors. Here's a list of them. But this is a guy. I don't even know. I know somebody that works for him. And he works in Silicon Valley. This is his business model. So like, here are the five or eight worst business model guys who are doing this. And they're all, the FBI doesn't say, do you know this guy? They'll just sort of give you like, okay. Can you help us? I guess what I could do.

So it's sort of like, how am I going to get meetings? It's 2008. So maybe we could say, hey, I'm out in California at this conference. Could I talk to the guy? I know that works for the guy that they want and get like a meeting at Starbucks just to say, hey, I'm thinking about, I'm probably going to get fired, not having a good year. You could get a free pass in 2008 if you weren't doing well. Nobody was.

And so I'm looking around. And by the way, how do you, like I had these four stocks last year. I'm going to have more information coming. How do you do it? And so it's kind of a clumsy way to be sitting with somebody at Starbucks. The wire that I wore so people know was like an inch or too big. I put in my front dresser pocket. So if it fell out, we still have blackberries then.

The FBI said like, just tell them that your extra of blackberry battery. Oh, yeah, that sounds like great. That sounds like the work. So I go out and they're like, okay, this guy in Silicon Valley, like I could tell they want him. And so the FBI agent, the female flies out with me to California. She's like, all right, three o'clock, tell them you're going to be in with the Starbucks Knicks of the conference. I go in.

I'm there first. I see the two FBI agents at another table. They're not making eye contact. And I think they just want to make sure that I'm not sliding a piece of paper over saying, like, I'm wearing a wire, you know, don't see anything. And so. Yeah, the Jordan Belfort. I don't know if you ever heard that.

No, yeah. Yeah, Belfort, when he wore a wire, I don't think they don't have this in the movie. Oh, do they? Mm-hmm. Oh, yeah. Oh, yeah. So he's going to, he's wearing a wire against his buddy. and he slips him a note

saying like I'm wired or something and so then the guy has this benign conversation where he's like, I don't know what you're talking about. And then, but then later they go to Jordan when they go to arrest him, they show him the note. The guy immediately went, got a lawyer, cooperated and gave him the notes. They're like, oh, we don't trust you anymore.

Yeah. So the FBI's there. So this hedge fund big shot guy sits down with me. He's 20 years older than me. I'm looking for a job. And I'm like, hey, I'm looking around. And I kind of had to suspect that he was insider trading also because it's not something a topic you would bring up if the guy is clean.

And so I said, I had these four stocks last year. I knew about Kronos. And he had been in Kronos too. He's like, oh, you know Kronos? I'm like, I have some more sources probably this year coming with more information. But like, how do you do it? How do you build your sources? And the guy just looked at me.

Like, I thought, oh, my God, he knows. Like, he must see this thing as huge on my chest. He doesn't say anything. anything. I felt the silence. I'm like, oh, do you, how about, do you watch that Niners game last weekend? Terrible? We never got back to it. The FBI at the time was not listening contemporaneously, like they would listen to it later. So he leaves, and they told me to wait 10 minutes, and then walk over and give it to them in Starbucks. I give it to them. I don't say anything. We're going to be back in New York two days later. I get, so I met with the FBI several times

outside my office in the black town car, which I always thought was weird. Like, what if somebody sees me getting into a black town car? Right. Like, This is just, you know, it's suspicious. I get in, they're like, Tom, we listen to it. I'm in the back seat. They're in the front seat. We listen to it. You're terrible.

Like, you change the subject. And again, I felt like I could push back, like, stick up for myself. I'm like, hey, it's my first time doing this, guys. Right. Did you know there was no training? They're like, all right, hold down, slow down. Like, okay. The guy's pissed.

Like, you know, if you're not good at this, Tom, we can just arrest you. You know, like, all right. So give me another chance. There's no training at the Wharton School of Business. I'm not wearing a wire. Maybe there should be. right so like all right let's try it again let's have a phone call with this guy because i left at that at least let's have a follow-up phone call had a follow-up phone call and talk a little bit more

and the guy on the phone call says okay you're asking me about Cisco systems i actually have a relative there in finance that gives me information because i was telling him about all my sources i'm like oh and then the conversation and they listen to what they're like yeah that's massive right like they're like and what you're going to do here tom is you're going to stop talking to this guy we're going to take care of it so this sort of situation happened all of 2008, 2009, where it was these meetings with people of interest. I'm the young guy interviewing for a job. And by the way, how do you insider trade?

And so I got comfortable with that silence, which I'd ask the question, they might pause for a minute and I'm just drinking my coffee. And eventually they would say something like that or, all right, this is how I do it. Because Tom's telling me about his sources, I'll give him a little nugget. Right. And I'm sort of leaning in like this, okay. Right. It's good.

And the FBI was like, wow, this is like, it's really good. And then you part ways and don't really talk to that person again. But that most likely they are then able to transcribe that, go to a judge. We want to get a wiretap on this guy for the next six months. And then they just listen to his phone calls. And, of course, he's actively talking to people on the phone. At that point, they can build the cases. And they build an entire case.

Right. That one, because they have to have a reason to get a while. You can't just go to a judge. Yeah, you have to have a reason. Yeah. Because it's a major invasion of privacy. So, and what the young prosecutor did, she had come from organized crime and went to securities fraud, white collar crime and said, actually, to build these cases, we need wired. People wired up. Like, we used organized crime. So that's how wearing the wire is going to start with these cases. And so I'm doing this. There's one guy really high up the FBI's list who lived in Greenwich, Connecticut, the suburb of New York. All right. I got in 15 conversations. He was always on to me. He's like, not talking about this. And then one of Sunday afternoon. And he's like one of the worst guys to, I suspect, like, his business model, for 10 years, which is four stocks every quarter, the long and the short.

He calls him in a Sunday, and he's like, we need to have dinner tonight. I'm like, okay, I'll be up there. And I called the FBI. They're like, oh, my God, he's going to talk tonight. They met me a Grand Central train station in Manhattan, gave me the wire. I took the train up to Greenwich. This guy picks up at the Greenwich train station. He says, Tom, good to see you.

I brought swim trunks for you. We're going swimming at my mother's house. Now, I think he's on to me at that point. And the Sopranos is popular that summer. So it's like, oh, about going swimming with the fishes. And so I'm like, okay, I actually still played it cool. I'm like, let's go swimming. I'm kind of used to it.

It's in my front pocket. But I'm like, how am I got to this? And it's not like the FBI is in a van. No, exactly. Okay, let's go get him. Like, go grab and pull them out. We're not going to let him do this. So they're putting me in a situation here.

Or is the FBI following you? So years later, I didn't know. My first speaking engagement at the FBI, we talked about. Like, they were like, oh, yeah, we thought that was weird. We took the black town car across the street. Okay. So they were there, but they were at a distance. But they don't know that he's saying we're going swimming.

Exactly. Because I'm listening to it real time. So we drive to this old mansion in Greenwich. He starts disrupting in this room. I'm like, all right, bro, I'm going to go get changed. Like, you get changed in here. I'm going to get changed in the bathroom. So he at least let me do that.

I take it out. I put it in my shorts and I put these swim trunks on. I put my shorts on the bed in the guest room. So he could have had somebody go through there. I guess nobody else is home. So we're walking out to this pool. It's so quiet. I see like a shovel against the house, a hole in the ground.

I'm like, holy shit. You never ask him, like, why are we going swimming? Like, this is what's happening? Yeah, I'm just like following him. And I see he has plants there, so he's having some landscaping. So I get in the swimming pool. You didn't ask? I didn't ask.

And so he grabs a tennis ball. We're playing this awkward game of catch. And he's pouring it on. I'm like, at this point, I want to get out of there. Yeah. So then I said, we're playing tennis. What are we doing? Why are we swimming?

He's like, all right, Tom. I've been acting kind of weird for a while, which I had. And he's like, Tom. He had spoken to an attorney. The attorney said, all right, this guy's wearing the wire. You have to ask him one question, and he asked to answer him truthfully. And so I was going to give him my cover. What attorney told him that?

I have to answer truthfully. What was the tax attorney? Exactly. So I'm like, you got me. I'm like, what is your question? So I was like, but I'm going to tell him exactly. I just want to go home. I want to just confess to him.

Yeah, this is me. And he's like, all right, Tom. The big question was, have you been approached by the SEC? who was the regulator. Right. And truthfully, I could say, and I'm giving him a hint, and I'm like, not the SEC. Right. And he's like, all right, I just had to make sure you weren't wearing a wire.

I'm sorry, I know that was awkward. Here's how I did all this insider trading, all the implicating statements. It's not recorded. And we get out, I go back home. And it's obviously not, you know, it's not recorded. He is actually years later, he's never, never charged by the FBI. Up until a few years ago, he was actually still managing money for pensions and endowments. Like, he was one of the worst actors.

it was never charged. And so it was really the kind of guy you want managing your shit, you know what I'm saying? Like, oh, yeah, there's all these people out here and they're like, that's horrible. But honestly, he's the guy I want managing my pension fund. Yeah. He's a winner. Right. Right.

And this isn't a how-to for insider trading, you know, don't go to a swimming pool to do it. But it's sort of like, so, yeah, so he's never charged. So that's like the craziest moment I think I had in terms of. They didn't ever tell you, like, go back. Like, can we go back and let's call him on the phone or get nothing. like that i told them what happened they're like so they were apologizing so sorry you were in that situation uh and we didn't we didn't follow up with that guy and so you know i guess the the a osa didn't pursue that case or whatever and then eventually so two months after that

2009 late 2009 middle of the crisis 20 guys are in handcuffs on cnbc so the first arrest happened roj roger otnam do you know this is coming no so he had booked a flight to london the return fight through switzerland not extradition the fbi i saw that And I think Raj was pretty sure guys were on to him at this point in 2009. And so the FBI, I think arrested him a month before they had planned to in October of 2009. And then 20 guys are arrested. I recognize some of the names. And this is a big day, like in the Wall Street Journal, it's like those tipping charts with the names.

And in the middle, it's Tipper X. And I'm trying to figure out who's Tipper X. And actually, they didn't tell me I was Tipper X. Right. I forgot to mention too. So at the same time of my life, that week those guys were arrested. arrested, my wife is in the hospital giving birth to our first daughter. They told me to turn on CNBC. So they told me when I'm in there, I turn it on. All these guys are in handcuffs.

I see Tipper X. I see it in the Wall Street Journal, I go out, you know, get the newspaper that day, and it says Tipper X. And I'm looking for my name. And I'm like, oh, shit, I think I'm Tipper X. And I call them, they're like, yeah, it's you. And they're like, you should probably talk to an attorney now. So, so, and everybody's like, who is Tipper X? NBC's, there's It's the story. Who is Tipper X? They mentioned all these well-known people. I'm sure we're very upset to be mentioned with this. At this point, I'm like 30. Still working in this capacity with the FBI. But my cooperation, I think, is starting to come to a close. I'm doing this less and less. And so I talked to an attorney. All I know about insider training at that point is Martha Stewart.

That's the only big, and that was obstruction of justice, not inside her training, where she sold the stock. And so I call him, you know, he's like, oh, you're not going to trial. I don't want your case. You know, so gave me a referral, and I talked to this attorney. He's like, wait, wait, wait, wait, wait, wait, you've been doing this almost two years. You talk to Martha Stewart's attorney first, and he's like, oh, you're not going to go to trial. I'll give you a referral to, you're going to plead guilty, you cooperated. Okay. I'll give you a referral because it's not going to be a big case, big money case.

Not enough money in it for him. Yeah, exactly for the trial. Right. So he's like, you're pleading guilty. It's an easy one. So he gives me a referral to a friend. I call my, to become my attorney. I'm like, do you see this stuff with Ciporax?

He's like, yeah, I'm like, that's me. and he was like, well, who's like, well, you call me now? I needed a case from your other attorney. I'm like, no, there was no other attorney. You're the first attorney I spoke to. He was shocked. He was like, Tom, did you know, the first day you're supposed to hire me when the FBI approaches you?

And I'm like, this is a recurring theme. Hey, it's my first time doing this. Right. Pretty straightforward. Next time. So next time, yeah, next time I'll do this. So he's like, we have to proffer with the assistant U.S. attorney. The proffer is you have to talk about all the bad stuff, the cooperation, all that.

And so I'm proffering with the U.S. attorney. And they're like, tell us about all the times in your life that you broke in the law. And I was like, when I was 17, I was speeding in college at the Napster. They're like, not that. Like, I spoke to join college. Okay. So, but they were, I think they must have bad. They're like, clean guy, other than the four trades.

Like, right. So profit with the U.S. attorney. And then I eventually plead guilty. So 2009, late 2009, I plead guilty. And I forgot to say, like the FBI. They're like, you're doing such a great. job for your country. This is the way they were framing it. And I'm patriotic and I'm thinking about, I'm just trying to say positive. So I'm like, maybe, you know what's going to happen? They're

probably going to drop the charges. And maybe they're going to have me like the Frank Avondale. Maybe I'll go back to the FBI every year and help them out. And so I'm thinking about, I'm trying to just stay positive. And it's all a joke. They're not going to, you can't be a professional cooperator with the FBI. Once they're done with you, you're done. And so I go in the courtroom and see the indictment for the first time. And the judge says, how do you plead United States of America versus Thomas Harden. And of course, I'm like, wait, I was doing this. I'm like, no, I'm not.

This is all. And then the young prosecutor, which I think for financial crimes are like, are the victims present? Are there, where are the victims? And he says, there's no victims. Right. And that's the rationalization. And so, okay, so my attorney said there's these things called the federal sentencing guidelines for financial crimes.

They're looking at the 1.2 million your firm made. And so the guideline was 30 to 36 months. He said, now you've cooperated a lot. You were a wire 48 times, which he couldn't believe. He's like, I can't believe you did this much cooperation without an attorney. I've never seen that. But the judge you got, you know, you can look at the judges. Are they more pro prosecution or more pro defense?

She was pretty strict. And at this time, Occupy Wall Street was going on. It's hanging these guys for the financial crisis, which the financial crisis was not insider trading. That was the mortgage-backed security, as we talked about. So, but anybody going to trial was like, oh, you know, the fact pattern didn't matter. You're a Wall Street guy. we hate you and so right she was pretty tough on people so we thought we might get a few months or whatever and so eventually they asked me to cooperate on two friends that I tipped on the cronos deal

I said I'm drawing the line there and they're like oh that's risky Tom and they're like basically they're like we're done with you tomorrow your name's coming out so the New York Times ran the story tip or X is Tom Hart and the Wall Street Journal made it a front page paper a story I forgot to mention I left my firm a few months before I thought it might happen any day so I didn't want to be working there. So I knew it would be a bad day for me and for my wife, obviously, same last name. So they released your name to perhaps Tom Harden, because I drew the line at two friends that they wanted me to cooperate on.

Okay. I felt I had done enough at that point. The way I rationalized the cooperation was like, I'm getting you the worst or the worst. All right. Hopefully I can save these two guys. I was going to say, like, yeah, but even saying that, those guys probably just took please anyway. Like if you, if you had said, said, yeah, whatever, if you just said, yeah, I'll cooperate.

against everybody. Those guys were going to take pleas anyway. They wouldn't have even known. Right. Right. Right. But I mean, I get your, you shot at it. And those two guys actually were never charged. They actually ended up having very successful businesses, multimillionaires. So what? I think they know, but for the grace of God, I'm in this situation. They're not. And I'm sure there's still buddies and they send you cards and call you all the time. So one guy actually had me come talk to his company. Oh, really? And he's like, you're not going to mention you. But he's like, but he's like, when Tom Hardin's tip or ex in the newspaper, he's like, I'm looking over my shoulder every day. Oh, yeah. I'm talking to an attorney. And somehow they had some. And somehow they had

so much on their plate, like the 85 guys were arrested. They just didn't get to the ones that were a little bit off. And so the other guy cut ties with me. He'll never talk to me again. So that day, you know, I lost like the 40 Facebook friends, half my LinkedIn connections. But then four guys from college were like, hey, man, I saw this. If you ever need to get coffee, you know, like you figure out here your true friends are. Oh, yeah.

It's, listen. Book club on Monday. Gym on Tuesday. Date night on Wednesday. on the town on Thursday. Quiet night in on Friday. It's good to have a routine. And it's good for your eyes too.

Because with regular comprehensive eye exams at Specsavers, you'll know just how healthy they are. Visit Spexsavers.cavers.cai to book your next eye exam. Eye exams provided by independent optometrists. To me, it's great. Yeah. It's like now I know. You know what I'm saying?

Like the same guys that are calling you and your buddy, buddy, and your good, good friends. and they, the moment something, the moment the chips are down and they drop you, you know, like a hot potato, you realize, oh, you were, you were, we were never friends. We were never, not what I consider a friend. Yeah. And I always see that, that saying where it was like, they would say, like, if you have three friends, three people in your life that you can say are we're true friends, you should count yourself

lucky. That's right. And I remember thinking, I got lots of friends, but I really didn't have lots of friends. No, no, that's right. So you figure out, in this situation, you figure out who you're true. friends are. And so four buddies email me. And then that day, so my wife was still working. She had left Lehman. Luckily, she was fired six months before the bankruptcy, so we could get out of the stock at like 30 before it went to zero. So that was actually good. So we had a little bit of money. And so she's

working. And now I'm a stay-at-home dad. Tipper X is a front-page story. It's a 24-hour news story, but it feels like it's going to be forever. The phones ringing in. These reporters are knocking on the door at my house. One of the lowest moments I felt, she got home from work. She's crying. She stayed with me at this point, holding my daughter in the corner. She's crying. She's like, I can't believe you did this to us. And if you wouldn't feel lower than that, it's pretty hard. I mean, like, it's all my own decisions.

And I put us in this situation, my family, and, like, wow. And she was so stoic up to this point. Like, you're going to get aside of this. You're going to figure it out. And she just had a breaking point, understandably, at that point. Like, reporters are calling. So it was tough. I had to tell my parents, you know, at that point, they're going to come up to visit their first

granddaughter or my first daughter. that was tough. You know, you feel like everybody trusted you up to this point, and then they had no idea this was going on for a while because I wasn't allowed to tell them. And so you start to, again, just figure out, you know, I let a lot of people down. Like, people trusted me that I wouldn't engage

in something like this. And then I wasn't sentenced to that was 2010. I wasn't sentenced to this little 2015. We kept getting a holding date for the sentencing. The pre-sentencing report was good. Like the 5K letter from the FBI was actually, you know, it's like, here's all the back. stuff, but here's the good stuff, which is a lot longer in the bad stuff. So that looked good.

So they prepare a pre-sentence report, which is prepared by a probation officer, which you're assigned as soon as you get in trouble or plead, I guess as soon as you kind of plead guilty, they give you, they assign a probation officer. He prepares a pre-sentence report or investigation report, whatever, PSR, and which is handed, they calculate the sentencing guidelines and they give it to the judge. And you have an opportunity, obviously, to argue your lawyer has an opportunity to argue because sometimes that pre-sentence report will say 10 years and then they'll give you a bunch of enhancements to get it to 10 years and then your lawyer can argue like what are you talking about like these don't apply you can't give him those

enhancements and maybe you can negotiate get it down to 7 or 8 whatever it is right so the pre-sentence report they give it to the they give it to the judge what did what did it say you're saying so that they were they were recommending no like no no no prison just because I helped them out so much right and the FBI rights it's called the 5K letter for the cooperator right so that that was being written, but we kept getting the sentencing day pushed out. And I'm like, I mean, I'm just applying for jobs to be like a back office finance guy to any company because I was a really good finance guy or Excel guy. And even when I had leads on jobs, neighbors were helping me out there like, you're,

you know, you're a good guy. I'll vouch for you. HR would always come and be like, look, you know, we can't hire this guy. He hasn't been sentenced yet. Like we don't want to take the PR of like hiring Tipper X at our company. So you're not lying to them. No, I was like, I'm going to answer that question truthfully. yes, I have a felony, but this is, I'm, I'm Tipper X. I would have lied. Yeah, exactly. I would

lie. Yeah, yeah. So I felt the whole thing out. And then, you know, there's no callbacks once you do that. And so I started, the one business I started was like the drop shipping business with Amazon. So I bought items off of Alibaba, the Chinese supplier and would list them for 10 times higher on Amazon placemats. I'm scaling that up. My Alibaba supplier in China starts hijacking my Amazon listing to get the buy the buy box. That's, that's not working. I'm just trying to figure out, as you know, just one person, businesses that make money. But I also was a stay-at-home dad, and one day I'm carrying my daughter up the stairs. I was actually, like, well over 200 pounds at that point, too.

What do you wait now? So now I'm 165. Okay. But I got down to, so I'm carrying, so I was like 2.15. And so I was carrying her up the stairs. And I thought I was, like, having a heart attack, shortness of breath. I go out of the doctor. I'm 32.

I hadn't been the doctor since college, typical guy. Everything I thought was fine. And they're like, oh, you're 215. I'm like, oh, I thought it was 175. He's like, he didn't notice your pants for anything anymore. And so he's like, the blood work came back and it's terrible. And what the hell is going on?

Of course, I'm like, Doc, probably the first time I told the story was this doctor. He's like, dude, cancel the rest of my day. This is an amazing story. But he's like, look, obviously this is wearing on you. And you're technically obese, actually, that way in the BMI. He's like, you're going to have to do something to at least tackle your health. I know you can't work right now or you think you can't get a job, but you're going to have to do something.

So I told my wife, she's like, I'm sending you up. for a 5K. And I played soccer when I was, maybe I had some endurance. And she's like, I'm going to beat you pushing the baby in the jogging stroller. She was athletic. And so she signs me up for this 5K. She does beat me. But it lights a fire. I'm like, I'm actually a pretty good runner. Five Ks, the half marathons, the marathons run like a sub three hour marathon, which is good for an amateur. I start running ultra marathons. What I'm doing here is I'm running twice a day. I'm doing like Olympic training plans over 100 miles a week. I'm not actually dealing with what I have to deal with my professional future.

I'm just putting that energy into what I can do right now. When she needs to have a very important conversation about my future, I'm just feeling it all into endurance sports. So I have like this addiction now to endurance sports, these ultra-marathons. And so I sign up for this 100-mile race in New Jersey around a one-mile loop. And it's supposed to take about 24 hours. And the veterans are like, what you do is like run seven minutes and walk three minutes because your quadruly and you get destroyed.

I'm like, I'm in great shape. I was down to 145 pounds at that point, no weight. And I'm like mile 31 lapping people. They're like, dude, it's not going to go well. It's 100 mile race. Right. So mile 78, I can't run anymore. Everything's breaking down.

I think I had rabdo. I'm peeing blood. I'm like, that's not good. I feel like shit. 78 miles. I'm like, I'm done. It's my first time. It's fine.

And I have an air mattress in my car there. Every mile you pass your car. So the temptation is just to stop. I'm like, I'm done. I pop the trunk. Go to crawl in this air mattress. And I see a note there on the pillow. And it's a note from my wife.

It says, we didn't sleep on you. You can't sleep on us. So I turned around all the rest of the way. And I got to 100 miles in the second place for the race. So it was the only feeling of like accomplishment, you know, during this time. I still had to be sentenced. But I'm like, again, this sort of theme of like she's probably not leaving me in the situation. But I got to figure my shit out.

Finally sentenced to judge, like, you know, you help build 20, these 80 cases. It says your PSR. You know, I see it's been seven years. you're just going to get what's called the time served sentence. So the one time I was at the U.S. Marshal's office before I pled guilty, just that couple hours of being processed. Right. So going with your life.

And there's an attorney there, I mean, sorry, a reporter there from the AP who was like, well, you became like this vegan ultra-marathon guy, like, let me write this story. You turned your life around. And then... Were you given probation? No, no probation either. Just the time served, which was just the U.S. Marshal's office, but still the security's fraud conviction.

So this AP reporter right. this nice article about me. And the producer of the first podcast that was ever on the Rich World Podcast reached out in 2015. So the first time I ever shared the story was in 2015 on the Rich Roll podcast. And the boss of the two FBI agents I was working with who I had not met was listening to that episode. And in 2016, I get this phone call and I see it's that unrestricted number that I remember that the, you know, when your phone ring and it's not, it doesn't say it's the FBI. It's restricted or whatever. And I remember, 2016 thinking, holy shit, this cannot be them. Like, I have already been sentenced. And my wife

was probably thinking, what did you do now? Right. I answered hello. Hey, Thomas, agent so-and-so at the FBI. I just heard your whole story on ritual. It's great. How are you doing? I'm like, actually, not that well, still struggling to find work. You know, this Alibaba, Amazon stuff, that doesn't seem to be able to be scalable. And I just found that, too. I forgot to mention that I couldn't coach my daughters in soccer because I had to check the box. And the commissioner said we have insurance with the league and it doesn't matter if it's non-violent like we can't have felons so how do you tell that to a five-year-old you know yeah so it was I was feeling bad you know it was just again it's all my decisions but like it's just it was in a low moment there too when he

called it just starts affecting every single aspect of your life yeah exactly like I can't coach her she's shy she only will play if if I can be the coach and I can't and he's like oh sorry to hear that yeah I wanted to say like by the way your guys told me not to talk to an attorney I didn't say that at first right and he's like back in the day tom of the 85 people we just thought your case was interesting. Like, you were the youngest guy we charged, and that 46,000 was like, one of the lowest. After they was rubbing it in, I'm like,

oh, I'm trying not to get caught. Right. Thanks, with anything else? So he's like, no, he's like, could you just come talk to our rookie agents? This is happening again on Wall Street, you know, eight years later. I'm like, why are guys doing this again? Like, he's like, you know, it's human behavior, people rationalize.

So I go, all right, I'll come speak to the rookie agents. I have nothing to lose. I'm like, here's how it happened. Here's what you guys said. Oh, sorry about that. So, but here's also, like, if you approach guys like me, they're, they're an asset to you. You can't tell them, don't talk to an attorney. This is what I would do.

Like, you know, they can do what they do. So I told the story of the FBI, and a couple of agents are there. You know, Tom, you should go out and try to start a second career telling this story for what's called compliance training in the industry and financial services. Like, every regular industry has compliance training. It's usually very dry, not memorable. Here's the latest rules in regs, you know, don't do it. all right go back to your right don't lie don't she don't yeah exactly so it's like are you watch these stupid videos like don't do this sexual harassment it's like very obvious in the videos

what not to do right so I'm like okay but I'm like who wants to hear this they're like no I think a lot of people this would help a lot of young professionals and so I'm an introverted guy like I'm not used to talking to crowds especially about something so personal and vulnerable but I'm like all right let me give this a shot I emailed maybe 500 cold emails to anybody with the chief compliance officer title on LinkedIn I saw all 500 hundred or 500 of many hundred went through two people responded one guy thought it was a cybersecurity attack because they're like what's temper X it doesn't sound that you're not him like no that's this is not that one guy's like hey come talk to my traders I mean I just listen to this

episode you did that's pretty cool and he's like I'm not going to pay you whatever but come talk and he's like that's the best training he's like I've been doing this 30 years I've never that's the best training I've ever seen and so cut me a check yeah exactly so after that I said can you refer me to somebody at a big fund. And I just started getting my reps and sharing this story at like local libraries, local, you know, Kowanus clubs or that type of thing. That's horrible. I remember one library. It was like 485 year olds. They're just like, oh, God. It's just like all who showed up and I'm like pouring it out, the swimming pool story. They're just like, I think there's something here, Tom. So eventually I look it up and we started, you know, I'm like, who does this?

There's this guy, Walt. Yeah, yeah. Walt's sharing his story. And I call Walt. He's like, oh, yeah, I know about all your case, tip for X. Okay, how much should I charge Walt? And he told me what he does. And so I just started quoting people. And in 2017, I had like 90 speaking engagements like in five countries. And I don't even, there was no booking agent. There was all referrals to me, cold emails coming in.

And so since 2017 to now, this has been like a full-time gig. It's like 580 presentations in 13 countries. I'm not a well-known person or anything. It's just been, I think it's been. it's not the easiest thing to do. I would say, imagine every week going to a company and saying, hey, here's the worst thing I ever did. You can feel the judgment at first when you walk in. Oh, yeah. Why is this guy monetizing his crime, which we might get? But it's not that. And then, oh, sorry, I forgot to mention when I spoke with the FBI, I'm like, who does this?

They're like, Frank Abingale. They gave me Frank's number. He never called me back. Thank God, because he'd tell me to make up everything, right? Yeah, I was going to say. He's talked to Javier. Yeah, yeah. So, so didn't talk to Frank. He never called me back. So I just started doing this at the conferences, and really what I do today is this compliance training financial services, but any regular industry, like medical technology where there's risk of bribing doctors or that type of thing, where you talk about, it's called the slippery slope, how it starts, and apply it to that industry. And it's sort of, I view this as like my act of, I think it's some kind of therapy for me,

like just talking in front of crowds, they're very much like, why do you bring this in? And you see their body language changed during it. And they come up and they're like, I kind of see how it all happened. Your boss is looking the other way. And at my company, I could see something like that, maybe not to that degree of a cash payoff or something, but it might be my situation here where I can make that wrong decision. And I don't know if you found this in speaking engagement. So people come up and confess not maybe crimes, like the worst thing they ever did.

I was speaking in London a few months ago. And a woman confessed to me like a 20-year affair she was having with a married man. I want to say, I just bought these four stuff. But people, I think the vulnerability has people open up. And I'm like, oh, wow, there's something here. And so, yeah, that's what I've been doing the last seven years is sharing the story. And then anytime a young employee, like a 25-year-old, maybe type A trader who thinks he knows everything, Stas me after this is like, I'll never forget this.

You know, I can see how this happen. I'm like, man, if I was you in 25 and heard this, maybe it's not my story. Right. So that's the idea. And one, two things with this, I was going through a lot of shame and guilt when I started. The first conference I spoke at the event planner was like, that was very dark. Like I was talking about, I was beating myself up. I'm a piece of shit.

And she's like, you shouldn't have the shame. Like, the shame is I'm a piece of shit and it a bad thing. The guilt is I'm not a piece of shit, but I did a bad thing. She's like, that guilt would actually keep this going. Yeah. But I'm like, shame and guilt the same thing. And she's like, that is not the same thing. And I'm like, wow, that was actually a powerful.

full insight. And then also today, you might have this too, like guys in a situation have been through something. They're getting their life back together. They'll reach out to me because they want to see how can they speak. And I want to pay it forward to other people with other stories, as we talked about before. But too often people are like, I made a mistake. What's your mistake? I embezzled $10 million. Was that a mistake or was that a bad decision? And we make both. But if we call our bad decisions, mistakes were not really owning those bad decisions. That's a whole bunch of that. That wasn't one I hit the wrong button.

Yeah, I didn't fall into the keyboard. Oops, yeah, I didn't accidentally do this. Yeah. So I would think for anybody listening, maybe in our situation or something like that, you have to say those were bad decisions, not mistakes. And you'll start to have a sixth sense of this when you hear people say mistake. Like, no, it was bad decisions. So.

Well, yeah, people don't want to, you know, like we talked about earlier, like they don't, they don't want to own up to, they don't, you know, they want to rationalize it. They don't want to own up to their saying or the whole. And I think the same thing with that, that woman speaking with you is, is the whole, you know, as far as keeping it going. Like, I don't get up there and apologize the whole time. Like, you know, nobody wants to hear that. Like, you know, maybe, maybe three people at a 500 might want to hear. Or they get offended, but they're going to, they're going to choose.

They're going to pick something to be offended anyway. Exactly. So I just, it's funny, whenever I start my speeches, I typically say, listen, I'm like, you know, at the end of this speech, a lot of you guys are going to think, wow, this guy is a complete scumbag. And a lot of you guys are going to think, wow, this is an ingenious guy. I'm going to say, the great thing is that both of you are right. I'm like, and I'm going to say some things that are offensive.

But at the end, if you just give it until the end, I'm going to let you know all of the things that it cost me. You know what I'm saying? Yeah, that's right. And then, you know, at the very end, I go. And the thing is, I know you know this from doing this many speeches. is that you tend to get 80% of the questions, probably 90%, are the same questions over and over? So you have those canned responses that are great.

And when I'm telling my story and I get to one point, like I know you don't know my story, but at one point, this is horrific. At one point, I'm like, and you think what you did was bad. I listened to the six hours. Oh, did you? Yeah, yeah, yeah. Yeah, yeah, of course. it's when I started surveying homeless people and whenever I surveyed just like I think I did with

in that Lex Friedman thing when you get to when I get to that point you can see people shifting in the crowd and I'll always pick somebody out and I'll go I see you judging me and people be like hey everybody roars like and you have those great set to me I have those great setups where I'll say something and everybody roars laughing yeah but one of the funniest things that happened to me during one of these speeches. And this was probably one of the first speeches I gave was I went to, I went to the Alabama, it was the Alabama professional loan officers or loan originators, something. I don't know, you know, annual, whatever. And it's a, it's, it's in Alabama, and it's a, it's an organization. And then they, they do compliance. They do all of those things.

And then they have a yearly, an annual meeting where they have a speaker come. And I came. Well, when they started announcing who was coming, the Alabama Department of Banking and Finance wrote them a letter saying that they felt that I should not be allowed to speak. And they wrote this whole three, four paragraph letter about how this is the wrong speaker for your event. Because they also have, they always invite them to come and speak about, think changes in the industry. Right, right. The guy gets up on the stage, and there's like three or four of them.

Yeah. First of all, there's like four or five hundred people here. They're all, there's like this one table where they're all sitting. These are all people from the Department of Banking and Finance. The guy gets up on stage. He talks for 10 minutes. And at the end of the 10, and I knew that the coordinator, event coordinator, had told me, listen, the guy that's about to get up and talk.

She's like, we have gotten some blowback. we've had a few emails that people have said this and this we've never had that before right they're like before you even talk before I even spoken for like because they've been promoting it for like a month or so and they've been telling hey this is our keynote speaker and some people are like wow she's like we've gotten way more that's great what I've watched this stuff before she's what we've gotten three or four people have been like hey man I don't think you should you should be giving this guy credence or his story but when the department of banking finance guy gets up he does a whole little speech and at some point

He kind of looks over at me and he says, well, I know you guys didn't come here to hear me speak. He said, so I'm going to step down now. He said, but I want everyone to know that mortgage fraud or bank fraud, you know, is illegal in the state of Alabama. And he looks at me and I'm thinking he's joking, right? And I'm kind of, I'm like, and I kind of laugh and I look at the coordinator who I'm sitting next to and she's, she like glances. and I realized, like, everybody's super serious, and I'm like, and I'm laughing. I'm like, and I sat there and I thought, oh, my God. He scowls at me, and then he gets off stage and he's a chubby guy, like, you know, waddles off stage and goes down.

And then she gets up and says, hey, we have our keynote speaker bubble. And I get up and I do my speech. Yeah. And I forget what, it was at one point when I got to, I said, you know, it's on the run. And at this point, you know, I said to get identities, I really. realize that my best course of action was to get people that aren't using their identities. And I end up, I devise a scheme to start stealing homeless people's identities. And I look right at him and I go, I see you judging me like that.

And everybody, he turned beat red. You could tell he was, and that whole table, it was, I mean, looking back, it was, but even at the time, I was like super, like I said, second or third, maybe fourth time I've ever done this. But at the end of the whole, and by the way, as soon as I was done speaking, like he got up and laughed, they laughed. But you're right, people would come up to me and people were bringing my book to me. Hey, people were saying, man, this one woman said, listen, my brother wanted me to tell you, he's extremely disappointed that he didn't get to come and that he has watched all of your podcast. And he's, you know, so she started telling me, subscribe, blah, blah, blah. and that he really, really wanted to meet you and asked if you would sign his book,

that he has a copy of your book. And I signed it. And she said, he's a financial, he's like an financial investigator for the Alabama state, like the police department, like the state department. She's like, and she's like, he just really wanted to meet you. And I'm sitting there thinking, this is an investigator for the police department that wanted to meet me. It was so disappointed because he couldn't get off work. And she's like, you know, I told him like a couple of days ago and he was so upset because he couldn't get his, he tried to get it changed.

And I was like, like, this is so cool. But I was going to say another one that I went to, which is fun, because it's all kind of the same thing. They come up. They want you to sign books. They want you to take a, you know, tell you something, have a question. This is after the 20 or 30 minutes of the Q&A. Yeah.

I did one where it was, I've done a few cyber conventions, right? cybersecurity, which I'm always like, look, the first one I did, I said, I don't really feel like I fit into this genre or this industry. And they were like, no, no, what you did was social engineering and that's a lot of what cybersecurity is, where you socially engineer your way into a position. And they explained it. I was like, they were like, that's what most of these hacks are. Yeah. I was like, oh, okay, I didn't realize that. So I kind of tailor, I talk more about social engineering. But when I was done with that, the industry as a whole are kind of computer geeks, and they're all in their

20s, 20s, early 30s maybe, and it was like being a rock star. I mean, I must have taken 30 or 40 selfies. Guys are getting together, taking pictures with me. I mean, nobody at the, nobody at the credit union convention wanted a selfie. These guys are like, oh, I can watch all your stuff?

Can I get a selfie, man? I'm like, this is nuts. And even their setup. Like, they had smoke machines. jeans and they're all where they're wearing they had it wasn't like a podium they're all wearing piece air pieces and they're they've got like a light show you have up music on the stage when you walk up they did I didn't they might have they they were playing I didn't give them music yeah yeah yeah like I understand you have like it you actually have like a slide show I just get up and start talking and they was asked like do you have a PowerPoint no no it's just me it's my slide is

just pictures and the storytelling it's like and I have a picture of a swimming pool not the swimming pool right so like is that the swimming pool no I didn't go there and take the picture of a Swimple. That's something there. But you're right. And I think it's only happened a handful of times here where somebody in the crowd would be the wise ass and be like, how do you feel about making money off your crime? They're paying you. And like, but usually the crowd all turns of that, and all the eyes go on that person. They're like, that's not what he's doing. And the negative sort of. I'm like, yeah. I think we can see here that this is not what I'm doing. I'm providing insights that are preventative today, hopefully for certified fraud examiners. But that one question,

if somebody's not buying it and hate you, like, I felt the same, all the 400 eyes go on that person. And so that person... To me, I've had that question. And unlike, like you, like I mean, I, you know, you're like you're saying, you're kind of an introvert. Like, I'm always like, I'm good with it. Okay. I'm good with it.

You know, this is what I'm doing. I don't do things for free. You certainly don't. This is how I make my living. I'm limited on how I can make my living. And I think the story helps. Yeah. Next question.

Like, I just shut that person down and move. The other one is I had one the other day, which was about like a, and obviously the guy, while I was talking, he had read, I had, I've optioned my, like, my life right story, right? Well, and he was like, well, I understand that you optioned your life right story. What if you make, you know, you know, you still owe $6 million and, you know, what are you going to do about it? And I was just like, oh, Jesus. Like, I can't believe. Like, you know, this guy was, and I was like, well, I don't think I'm going to make $6 million.

So I'm going to pay restitution based on what I recoup for the actual life rights. But that's hard. It's really, you know, I also have an agreement with the federal government to make payments. Yes. So, however it works out, that's what I'm. I'm going to abide by my agreement. Yeah. Okay, so the answer is just yes.

Right. And I thought, you could tell, everybody's looking at that person at this point. He's, you know, I was like, yeah, I guess. Yeah, that's yes. You know, it was just like, like he came off kind of like a jackass. Yeah. But typically everybody's very, very cordial, very polite, very, I never really have anybody. You could just, I could tell in his voice, he was kind of a jerk off.

Yeah. But I found when I go overseas, too, they're actually even more receptive because it's sort of a different thought that he's reformed now. He helped the FBI now he's doing this. Whereas in the U.S. There's sometimes more of a punitive culture. Like once you're a fraudster, you're always a fraudster. It just overseas, like you mentioned the pictures. And when I go to Asia, it's like everybody lines it up to take pictures.

Yeah, yeah. It's fun there. And the story translates overseas because when I started traveling for talks, it's like FBI, wire wearing. Are they going to understand it? Like, it definitely, it still lands overseas because, you know, the FBI can work with law enforcement in other countries to bring cases. If they're trading U.S. stocks over there, they can still bring cases. So it still resonates.

So right now, though, the problem is, and I understand you're doing X amount of talks, but I think this was kind of like with what Walt had told me. He's like, at some point, he's like, you've talked to everybody. You know what I'm saying? He's like, he said the circle gets smaller and smaller. Right. And he said, so you get to a point. He's like, so you have to, you have to, you know, understand that this may not be, he had mentioned forever, but at the rate I'm going, it will be forever because I do one every two months.

Yeah. But you're actually making, I need to talk to you about how to make a real, you know, push for it. Because if I could do one a month, yeah. If I could do one or two a month, like, wow, that would be great. Yeah. And I do love doing them. Right. You know, they're super cool to do.

It's a really interesting. And you do feel great about afterward. Yeah. Um, um, but I was going to say. but you're, you know, but then I guess you're not going to run out of compliance, right? Yeah, and there's new employees. So even my clients from seven years ago, I'll pit them up. Hey, if half the company is new from seven years ago, I'm happy to come back.

And even the guys I heard it seven years ago, they're not going to be like, no, don't bring this really compelling speaker back. Right, right. And then when you do it, you have more insights from not just your own story, but other clients that have had me in. Hey, you know what? Here's this story. But also last week, I was speaking to this company where they actually went through an investigation. they told me about we had NDAs because I worked that into my presentation about here's the tip or X story and by the way this happened last year because compliance is like

make sure you like customize it based on what happened here with this employee we can't talk about because with employment law they can't mention the pump person's name but like I worked that in so that keeps it fresh but to your point too I don't see myself at age 60 being like hey I'm wearing a wire in the swimming pool or whatever like I mean maybe I'll still share that story but it's going to have to evolve and it has for for wall too so I kind of have to figure out I like doing it and I was still busy as pre-COVID because it was more fresh than or whatever so I have to figure out how I'm going to keep this going maybe another line of business around the story or maybe courses or that type of thing so I can kind of if the speaking were to slow down

I might have something else I can sort of fall back on and I was that I was this funny I had a guy locally who has I don't know what they've got they've got like a hundred and some odd brokers maybe 200 brokers, but they only have maybe 30 or so that are in the office. This is a building. This is right downtown Tampa. And I remember the guy sent me a thing, hey, listen, I really need to talk to you. I own a brokerage. He owns a lender.

He's a lender. But I have a bunch of loan officers in here. He's like, and I recently, recently caught a broker that had, he had, he done, I want to say he had provided 1040s or altered his clients 1040s. he said, which is, you know, shocking to us. He said, but what was more shocking is that he said, when we confronted him on it, he didn't, he, you know, obviously it was him. He said, he really tried to normalize it. He really tried to say it's not a big deal.

It happens all the time. What is the big deal? Why are you guys making such a big deal about this? He said, and we've got, whatever, 200 loan officers. He's like, and I'm like to think it is a big deal. He's like, but I'm not sure. And the way he reacted, he told me, the way he reacted made me think, this is something everybody's doing. And I'm like, what?

He's like, he didn't say that. But his, the way he reacted was like, it's not a big deal, bro. Like, this happens all the time. He didn't say everybody here's doing it. But the way he said so, so he was like, bro, he's like, what would you charge me to come talk to my brokers? And he's like, we only have about 30 or 40 in the office, in the conference room. He said, but everybody else will be on a, you know, like a webinar. Yeah, yeah.

And I was like, yeah, I'll come talk to you. So I went, I drove down there and was right in Tampa. This was a while ago, like a year or so good. Do you remember me as a mission? Yeah, I remember that a while ago. Yeah. And I went in and I talked to it. But it was because typically they, I know that in these companies, like they have people,

but this was one where this guy was, this was like the one of the owners. And I mean, panicked. Panicked. I talked to him. He was just like. And then when I was done, I remember I was leaving. He and the other guy, the other owner walked me to the elevator. And he was like, listen, he said, like I had seen you on a podcast or two, he said, and, you know, you kind of joke around about it.

I was a little afraid that you were going to make it seem, you know, cool. Glamorize it. Yeah, glamorize it. He said, he said, but you didn't do that. He said, bro, this is so much better than I thought because, of course, I don't, I don't do all that in that, you know, it's a serious type of company training. Yeah, it's a serious situation. Like, you know, I talk about underwriting. I talk about, you know, processing.

You know, I talk about all those things and all the deal. different situations that come up that are, you know, I go into all of that way more than I do when I tell, you know, it's not entertainment. You know, this is an entertainment. Right. This is, you know, but yeah, but that was super cool because I remember he told me later. And I typically get those. You get those emails later where they say, listen, I got a, we got a bunch of emails from people

that said, wow, that's amazing. No, that's really fulfilling when you hear that. Yeah. They keep talking about it. And it sparks conversation, you know, years later, even some of my clients would be like, oh, one of our employees came and realized they were rationalizing something. you don't really know you're doing it until you're doing or you hear somebody talk about that and they came and asked the right questions and we got to the heart of this but it's interesting

because it always does start with that small decision like the 1040 guy figured like well this is normalized behavior or everybody does it is a common thing for people to fall right pray to so if we can relate our own stories to something that they might be experiencing then that's a really I think a preventative right you know thing and so much of it too is like the culture inside the company where people talk about like tone at the top of the organization and I would say tone is just a signal it's like the behaviors that you see is how things become normalized so one definition I have for culture is like the behaviors employees believe will put them ahead like that's really like what the culture is it's not the tone at the top or the poster on the wall

like that's yeah that can be hypocritical it's not actually yeah that's yeah that's how things start have you did you ever write a book so I'm working on so I have a book proposal now that I'm shopping to like the big five publishers. Right. And I'm working with a young writer director on a scripted rights situation right now. And so we're hoping to get a scripted rights sort of pilot or something written up. The book people, because I'm not famous or don't have a huge following, they're like, this is a great story, but he's not famous.

So like somebody gets, but they're like, hey, if he sells a scripted right situation to a streamer, then we'll buy the book right. So it's sort of a chicken egg thing right now. But I feel like this could definitely be like a movie or. Yeah, you could, I mean, you could always just publish it on Amazon. I mean, you're doing, you know what I'm saying? Yeah, a lot of people do that, too. Just because that would be my business card for speaking engagements, hey, here's my book.

Well, yeah, and not just that. Whenever you do the speaking engagement, they always want you to, I almost never do. They're always like, hey, can you bring like 20 or 30 books? And it's always like, I really hate the idea of peddling books. Yeah, yeah. You know, but what you can do is you just get a printed card. Yeah, the QR code and just with the name of the book, say, boom, here so you can buy it here. Or, you know, or you could do a different one.

Say if you buy here, if you scan it and buy it here, like I have my books on Etsy. Like, if you buy the book on Etsy, I sign those books. Yeah, you can do that way too. Yeah. And, but yeah, the scripted series, you could option your life rights or, you know, and then people would yell at you for, you know, you're making money off of, oh, for God's sakes. It was $46,000, you know, so. Yeah.

So I'm looking at that. And that would probably then get me a bigger platform for other industries, like just not just finance or, like you said, the circle at some point starts to slow down. That'll open it up or have it just a. hopefully a bigger platform for this. Right. That's my goal at the next 12 months to have something like that happen. And it's fun to have a creative project going just right now. Yeah, yeah, absolutely.

It's such a, see, I once said Wolf Wall Street story. It's such a Wall Street story. The only difference is at the end of Wall Street, when Bud Fox gets grabbed, he wears a wire against Gecko, but the whole thing's over within five minutes. The whole thing's over, where yours would expand on that. Right. that part. Still, I mean, it's very much like that, especially you're so young. You were just like a baby, bro. You're like, you're 25, 26, 27. Yeah, brain's not developed until like 25 for men,

right? Maybe not even now. I'm not prepared for this. Exactly. Yeah. That's, that's, yeah, 28, 29. And like, yeah, everybody in their 40s and 50s can look back at themselves in their 20s and have some, like, wisdom. And I think what I was saying earlier, I think is like, I was just joining an insecurity because these are the guys were cheating to get ahead when it's easier to say than done. But like if I had just been focused on myself and proving as a traitor and an analyst and just competing against myself and not drowning that insecurity, it's easy to say now. But maybe when she calls me, this is happening, I could just be like, look, we don't do that

here. By the way, I'm hanging up the phone. Don't call me again. Right. That takes a lot of moral courage, maybe in that situation to say no and have, you know, I can't, as we say, can't change. now I can only just make decisions now to like what should I be doing now and like you know sharing the story and hopefully it's provided of all Raj yeah Julian did a whole podcast on

Raj yeah Julian Dory who is that guy what's he's huge yeah huge but was he hedge fund or just invest her hedge fund so yeah the woman that had called me had work for him and he was sentenced to 11 years I think he served maybe nine I think it was like Kim Kardashian helped him get out because she was his health wasn't good or something he said he got out a little bit early and then wrote a book he managed to make it well i mean it can't be but his health the health issue couldn't possibly be because he's 150 pounds overweight you know maybe slow down on the eating right like i don't know what's happening um but yeah he did he did julians i didn't know kim cardashian i think he left about yeah but yeah he had written a book and i remember julian my buddy julian he

said i because one time i asked him i said did do you ever prepare for your your your prepare for your stuff because I have a buddy who's always like well your buddy Julian clearly prepares I'm like no Julian's just smart he's smarter than me I'm not preparing and so I'm arguing with my buddy and then I asked Julian I said tell him that you know you never prepare do you he said the only one I ever prepared for and I think he's done a since then he's done a few more is with Raj's and he read his book okay he was because it was such a complicated case yeah how do you explain this yeah and but yeah he did almost a it's like almost a four hour podcast with him okay and I want to say that the Raj, almost the entire time.

And I could be wrong. So you might watch the podcast and be like, he admits he did stuff wrong. But I think almost the whole time it was like I was, it was all bullshit. It was set up. I didn't do anything. I didn't know. So. No, I was so close to it.

I knew, I knew what was going on. Right. Yeah. Any questions? Yeah, yeah. Just to clarify, you didn't wear a wire on this guy, Raj that you guys are talking about. No, no, yeah. But he's like at the top of the pyramid and then like the one woman worked for him.

Right. And she's spreading. It's funny in Wall Street, they explain that, because they do that in Wall Street where they're calling up. But they have a, they have it super cool. They have like a, they're like, um, was it, a blue star loves. Oh, Anacott, Blue War Shoe loves Anacott Steel. Yeah, they had like code words. He would call guys at different firms and then they would buy the stock.

But they were, where they were, was it kind of a pump or were they? That was more, they were going to be acquired. And so they knew about to take out before it happened. Okay, so they were able to short it. And they were able to actually get in before the company was taken over. Okay. And so they were making money. Then they would sell it when the stock was up 30% on the takeover.

So he had a huge network on the Deco did. I can't believe, bro. You have to watch Wall Street. Oh, it's a seminal quote. Greed is good. That was his personal quote. Yeah, yeah. He does a whole speech on Greed, Gecko.

And that's to this name. Everybody in Wall Street knows who Gecko is. Yeah. It's just saying like, you're a bro, don't be a gecko. Yeah. Michael Douglas, best character probably, yeah. And then they did a second, and then they did Money Never Sleeps.

Oh, that's right. They did the second one where he gets out of prison and he's got a book and he does keynote speeches and that's a great one too. Oh, I have to actually watch that. No, I've never seen the sequel. Oh, my God, it's great.

It's a great one. Because he has a whole turner. It was the last 10 years, right? Yeah. It was years after the first one. Huge thing. His ex-wife went and sued him because she was like,

I'm supposed to get residuals off of any movies that turn in where they do a second movie And the argument was, this isn't a sequel. It'd say they had some other name for us. Like, come on, bro. The character gets out of prison. It's a sequel.

But, yeah, go ahead. Sorry. So what? So the lady who gave you the tip in the beginning, did she only call you or did she give multiple people tips? She probably had a bunch of the beginning. It was actually like she called Raj. And I think she was the main person who wired up on Raj.

So she only got, I think, one year in prison when her guideline was looking at much more of it, because she helped them out with Raj. She got that credit. And so she was talking to me. She was talking to one client in New York in Raj, like three or four people. And so that's, she wasn't talking to a whole lot of people. Oh, I figured she had a couple dozen people or something. She had done this before.

So back in 2001, they were trying to build a case against Raj. And they knocked on her door in 2007 or six. And they're like, we can't believe you did this again. You're a recidivist. Here's the lawyer you used last time. What I do. So exactly. You know that.

sort of like her 60 minutes interview was sort of like this is what this is what i did and so they're like who did you tell and oh raj this guy in new york and this knuckle had 28 year old tom hardin they're like who was that could you go meet him and i think that's you know where i got roped into this whereas plenty of guys probably traded hilton didn't get caught because they didn't know her they was sort of different webs right like like you calling your buddy and that whole firm doing that he they don't know her yeah exactly exactly so that's that's how that part was set up yeah with some of the people that you wore wire on do you know like maybe the most amount of money someone made personally and maybe like the longest someone was locked up i think the longest somebody got was like five years but the money i don't know because it was in funds and then they get percentage of the fund so i'm not sure

i know of all these cases it was like 700 million dollars of everybody of these 85 people which you know that pales in comparison to like the mortgage back security stuff which i never prosecuted anything anything right But, yeah, I don't know the exact numbers. Yeah. Have you ever made contact or has anybody ever contacted you since then? I haven't heard from anybody in these cases. I always look people up. And I think a lot of people, we were talking about this before, I used these reputation managers where they take all the bad stuff off.

Yeah. And I'm sure you get these emails too, like, you know, this AI email. Mr. Thomas Hardin, I found this indictment about you. We could take this off. I mean, no, actually, here's my website. I'm open for speaking engagements. Don't take the bad stuff off. Right.

Keep it on. but I think a lot of people clean up their Google in these situations. When you were doing that, were there any, like, unique ways that these guys were, you know, getting this information other than just getting a tip from somebody? Yeah, so there were tips. There was one situation where a woman was tipping a few analysts who worked for Steve Cohen, which was SAC Capital, and he's now the owner of the New York Mets. So a couple, like 13 of his guys went to prison, and a woman was tipping them with information,

and they were giving her, it's a weird story. Like, she actually, like, I think crabs or something. And so they would ship her, like, stone crabs or something, these quid pro quos for the information. She's just, like, I want food or something. So that was weird. One guy that worked at SAC, he flipped on, like, his best man in his wedding and was, like, wearing a wire at a wedding or something on a situation.

So there was these odd stories. I think one guy had, like, tips written down on paper and like you know swallowed the paper type of thing something like very juvenile right what i was going to say i wonder what raj was offered because he went to trial didn't he went to trial um i'll have to read i just heard him on cnbc like the one interview to your point i didn't want to read his book after that because he was sort of like the system is screwed up look at this how i'm a victim like i knew exactly what was going on and like for him the way i look at it was like 80 90% of what he was doing was legit it was just a small part that was not and so i'll have to listen that show but

What they offered him? Oh, what they offered him. I'm not sure what the deal was before he went to trial, but he was all. Because even to go to trial at that dollar amount and lose and get whatever he got 10 years. I think he got sentenced to 10 or 11. 10 or 11, I mean, usually like they come in, they're like, look, plead guilty. We'll give you four years or three years. And then you go to trial, you lose.

Usually they give you 20 years. You know, it's like 10 times or five times as much. So even, especially with those dollars, the dollar amounts. I mean, he had to be just off the chart. Yeah. Let's see. Were there any times other than the pool that you had kind of a close call with getting caught with the wire? There wasn't anything like that. Like that, like there was just situations where people would change the subject very quickly, so I suspected that they were onto me. But there was never trying to think. There was nothing, you know, it sort of went from people changing the subject to this

guy invited me to go swimming, but there was nothing really in between. Do you think, Now, like 2024, the technology's got to be way better. Like, you're not wearing, like, what do you think they're like someone who's Yeah, now they're probably listening actively. They're probably in a van or they're in the car listening to the conversation. And there's probably nothing on the actual person, you think. Well, now there's like cards that they have like for cell phones. Like my cell phone, I could have, you know, a card in here on the back or something and put it down.

But they're listening, I think, contemporaneously too. And it's interesting. Insider trading, how much is it still? happening like how much does the SEC catch or the FBI catch the latest because I speak at schools I know professors who research this stuff like okay here's what's happening in the market how much are they catching and the latest research is like they only catch about 15% of what actually happens even though they can bring about 50 cases a year so one a week they're not really they're not catching all of it they can only bring 50 cases like what well they that's that's that's not what

they can only do but that's about if you look every year how many cases are brought that's about what it is And I think the challenge with the SEC is they have like a $2 billion enforcement budget. And you think about all the bad actors in the world combined have billions and billions of dollars more in terms of how they can bring the bad, do the bad acts. And so you read the 50 cases now and it's always like, oh, I can see this person had this information. They called their uncle in the stock market. He traded probably took the SEC five minutes. The more professional cases, the more sort of organized crime is happening. And I think the SEC just as a regulator, overworked, underpaid, underpaid, underage.

they're resourced. They don't have sort of the resources to bring down some of these major networks that are happening just because of a budget or not really a focus by them to bring down these bigger rings. And so what's happening now is it's like more organized crime where they'll hack a company's website, maybe through fishing, get through an employee, and then start trading that company's stock around the earnings announcements or the takeovers. And so it's a more complicated case for the regulators to investigate. And I think just it's sort of like, all right, We can get this guy every week who's making $46,000, knucklehead, scare him, and then get that. And the average disgorgement by the SEC in these cases is $58,000.

So they're not catching the – occasionally they get the multimillion-dollar ones for PR. Right. But usually it's like $58,000. Some guy blew up his career for what's the point, you know? Do these guys have any type of restitution that they have to payback, or let's say they've been doing this for years? And they've made hundreds, if not, you know, $100,000, $1,000, million? There's like, do they have to pay that back? Yeah, it all has to be paid back.

There's restitution. In my case, we thought on the 46th that there might be a penalty too, but there was no penalty beyond that. So for me, it was like who is the victim? Who am I paying this to? The government can't get a, right. You know, there was a time, I want to say, the law changed in like 2009 or something, where the government was, they were giving fines and restitution paying. just on a whim, like, oh, and there was $12 million in loss.

The problem was is that there was no way to account for where that $12 million was going, and the Supreme Court ended up saying, listen, you can't arbitrarily stick people with millions of dollars in loss because you're keeping it. Yeah. Like we have nobody to pay that. You owe $12 million. You have to pay it, but we don't have anybody to attribute to that. So we're just going to keep it.

So it ended up being a windfall for the government, and the Supreme Court eventually said, wait a second unless you can prove where where this money's going to go you can't just say yeah because like with mine they said initially they said there was like 20 million in there 22 26 million the loss and then it went down to like 16 and then my pre-sentence report said 9.5 and then I was like I'd love to see where you're figuring out there's 9.5 million then they said 6 million yeah and I was like they can just make that up even my lawyer was like yeah they can so I got stuck with 6 million. But then a couple of years later, the Supreme Court said, you can't do that. But guess who's still stuck paying $6 million? Because there's no way that they can figure out where the $6 million is. Right. They can't show you the math. Like show you work. That'd be too much work. Yeah, exactly. So I do, I have a question real quick. Can you, I know you can't buy and sell stock for other people, but can you own stock in a company as a felon? So I can't, so I can't have a personal trading account in my name. So I have a three, my company, I can have, like, a retirement only at Vanguard.

So vanguard is just what's called ETF. So if you buy the S&P 500, that's all I can do. So I can have that or I can just, you know, have exposure to the stock market through an index fund. So I can't trade single, single issue or single stocks. So you can't buy 10 shares of Ford. Right, right. And hold it for 10 years and then sell it.

I can't ever touch single stocks again. I have a lifetime ban through that. You do. Is that all felons? Like, could I buy it? I think for financial frauds, that's a good, that's a good. Also, I've had issues with, I'd be curious, like, checking accounts at any major bank. I can't, like, I have a checking account of the credit union.

I haven't been able to open that a checking account ever. I have one at Wells Fargo. Really? Okay. I do. But the halfway house had a deal with them that allowed you to open one. I know other people that you're not allowed. And I turned around at, I was still in the halfway house.

And I opened an account at Bank of America. And like a week later, they closed the account and set my money back. But I owe Bank of America like $2 million. And I feel like they're holding resentment. Yeah. But I go to get these letters. Mr. Harden, you have 30 days to close your account. And I know it's to do with my case.

One day a retail banker would call me. He's like, Tom, you're on every AML list in the world. I go, what's AML? He's like, you're a potential money launderer to any bank of the world. I'm like, money laundering. But he's like, because it's a financial crime. Did you say that? this again i would never do that that's crazy and so i have some

put up cardet union you know where at least and so that's i'm strictly i'm strictly stock fraud exactly you're going to tell that you got it's money laundering but i can own a little bit of bitcoin because that's not right right now so that's actually been okay okay yeah my only perception of the wall street culture is from the wolf of wall street now i'm sure it's not as extreme as that but does that kind of part party culture existed where you worked or how was that yeah so that wolf of wall street was more like you know ripping off grannies and stuff pump and dumps that's not much what i was working and that's kind of changed now but there is you know at that time like

you know i was going the brokers we were the clients of the brokers so they would take us on these lavish trips to the kentucky derby or you know going to the super bowls and playing flag football with michael vick like that was our strip clubs that was that was part of it but today it's kind of like there's so much regulation that there's a lot less of that you going on. Extremism. Yeah. The extremism because it's just sort of looked down upon.

I forgot to mention, too, like, we're insider treating us. We could talk about Congress, too. Oh, I was going to break up Nancy Pelosi and all of them. Every conference I speak at, they're like, they got you for $46,000, but Paul Pelosi or, and it's not just her. It's like there's this thing called the Stock Act. So it was, it was legal for Congress to do it until 2012. There's a Stock Act. and they said, you have to file all your stock trades with us, or you have to pay a $200 fine.

And so what they started doing in their relatives accounts was the trades happened. So Paul Pelosi, or I think it was even on the Republicans like Dan Crenshaw, Tommy Tuberville, were also doing this where they would violate the Stock Act and pay a $200 fine. So of the 400-some-odd people or the House and the Senate, like 97 people actually violated the Stock Act in 2022. but it's like, yeah, I'll make $4 million on this trade and pay a $200 fine. Congress, over the years, has tried to put bills forth to outlaw this, and it's actually the one thing where, like, both parties can come together, but they have to regulate themselves. And so there's a bill actually on the Senate floor this week, which I don't think is going to

pass, and it's got bipartisan support. Actually, it's like AOC and Matt Gates actually agree. This is the only thing they probably agree on is getting this bill forward. The problem with the bill in Congress this week is they say, say if you trade single stocks, the penalty will be 10% of your gains. It's like, well, yeah, that's a tax on I'll make a $4 million trade. Yeah. And I'll pay $400,000.

Of course, the ROI is actually very nice. And this bill says it doesn't start until 2027. So do all your insider trading now the next three years. And it's still not going to pass. And the other problem is if you come into office, you have to sell all the stocks you won, which I feel like once you come into office, then you can't trade. So if Trump gets elected, he would have to sell it. his truth social stock, which doesn't make sense.

So why would you run for office? So I don't think it's going to pass. If they just said the bill is once you get elected, you cannot trade stocks. And if you do, you're going to be prosecuted like anybody else would be. I don't know why they can't get there, but I think because they make the laws, they want to keep doing it. So I don't see it changing. But I always get that question to the conference.

Why can they do it? They make the laws. Right. You think most of the inside information just comes from them knowing what, the laws that will change and affect businesses? Or how do you think they're getting their inside of information? There's people that, so, you know, with it happening today, there's just people that share information that work on deals. So bankers, lawyers, accountants that work on these takeovers. And they'll just people that slip up and share information or they're

not thinking or they'll, you know, you read these cases. It's usually like there's three friends who are one friend's the lawyer. He's tipping his college buddies. And then he gets a kickback for 40,000 or a vacation and it's just like there was there was one where nancy pelosi like a week before the whoever it was the the government filed suit against like google she goes in and they sell all their google stock like you've got you know they have you know 10 million dollars in google she and her husband they sell it and a week later boom the the government files a lawsuit against google and of course the stock takes a drop well she knows ahead of time yeah yeah so losses avoid it is a big thing too they sometimes don't catch like you can see the gains but avoiding

those losses yeah you don't see it but it's actually like a huge huge thing yeah or if you find out let's say let's say eight months later she finds out they're going to settle she goes in and buys you know 10 million dollars with a stock and they find out that they settle and guess what the stock shoots up like hey there nobody's going to prison they settle for a reasonable amount yeah and the stock shoots back up like they have this sometimes it's just insider knowledge that they have I mean, sometimes, obviously, people are, you'd scratch our back, and we're going to give you this tip. Yeah. And defense stocks, it's really prevalent, too, and sort of like, hey, we're going to give more money to Ukraine or whatever.

This is going to help this vendor or whatever, and they're going to buy that stock. And back in February 2020, there was three senators who found out about, oh, shit, this pandemic is going to be horrible. And I forget his name now. In February, he sold all of his, like, hotel stocks. Like, oh, yeah, people are probably going to stop traveling. And so in February 2020, sells a stocks, not even probably, never even. investigated. Do you imagine?

And then he votes for the bill to have everybody stop being able to travel. Yeah, everybody stayed home. Yeah. See like that was. You avoid some losses, sir. Yeah. So you say on some of your speaking engagements, it's not just like stocks and insider trading. There's other things like, like you said, bribing doctors.

Like what are some other, I guess, industries that you kind of speak to or things that go on that you would apply to? Yeah. Like so highly, highly lyrigued industries. So not just insider trading, but when there's when there's bribery, so medical, you know, medical devices is a big one where the med tech person or the rep is visiting the doctors. And even if you buy them like two glasses of wine, you're actually breaking some of the rules. And that can be something where you're where you're charged for paying a bribe, even though it's not actually like a cash payoff. FCPA is the federal corruption law where people travel overseas, salesmen in a country that has totally different laws where corruption is more normal. normalized can get in trouble for paying a middleman to get a deal done, which is actually very common, like, hey, I'm in this country in Africa. They get this big defense contract. I have to pay this guy and he's going to take care of it. You can totally rationalize it. Like, all right, so it's done. And actually, no, you're an American working for an American company. We're going to put you in prison because even though you're in this country in Africa, you actually violated the laws here. So that's very common for sort of where's white collar crime happening today.

So on your speaking engagements, what's kind of like some of your best points for these people to avoid this? So, you know, in my situation, again, the boss comes in was clearly telling me to do something unethical. You know, I always tell young people to ask clarifying questions. And, you know, is what we're going to do here. I don't know if my boss would have snapped out of it and said, of course we're not going to insider trade. Because, again, he's like looking the other way later anyways, so he knows. Right. And he was actually never charged, which I was shocked by.

So it's important for people to ask clarifying questions. I think just get outside your own head in my 20s, had I had the right mentor and said, you won't believe what's going on. Raj is doing it. Steve Cohen's doing it. This woman just called me. I'm thinking about doing it one time.

I think the right mentor would have slapped me around. Tom, here's that iceberg underwater. Here's that reward you're seeing. Here's that risk you're not seeing at 28 years old. I think just sharing what I was seeing would have maybe help me change directions, so not acting in isolation. And also when I speak at companies that are like, Can you review our code of conduct, our code of ethics?

Like, it's always like, ask these 10 questions to yourself if you're ever at that line. And for me, the one question is, if I make this decision, am I willing to be held accountable? At the end of the day, that's all it's about. Like, we can't be in every sort of situation every time where you might be. But if you make that decision, if you decide to white that or whatever, are you going to be held accountable for that decision? And I think that's all, I want to wrap up these codes of conducts or you're not asking yourself 10 questions. It's the one question. Yeah.

So why don't you think your wife, why do you think your wife stayed with you? No, it's great. It's a great question. The 19 years last month, so very lucky. You know, the Catholic, so that, I think that helps for better or for worse. So this was definitely a for worse situation. And I think, like, I mean, not to say she knew who I was, but she knew I messed up. Like, she could kind of just, she just put trust in me like, hey, you're going to

get inside of this somehow and figure out how to get back on your feet. But I don't, I think if she would ever want to talk about this, her side of this would be very interesting to a lot of people, a lot of groups. Like, I do stay with this guy. And so I don't have a great answer for that, but it's just here we are, you know. And so I always say, if I'm traveling a lot, am I too busy? I'm traveling too much. She's like, you didn't work for about 10 years. You can keep speaking.

It's good. And now the kids are older. And with my kids now, too, it's great. They're 14 and 12. So they can, first, they're like, oh, my dad committed a crime. And he goes and talks about. The other kids are like, my dad's a fireman. What's you doing?

But now I can see their own slippery slopes where they come home and they're like, hey, everybody Googles the answers to the homework. I'm going to do that too. I'm like, actually, stop there. This is where it starts. It's actually 14 years old. Right. You start crossing these lines. Or now in high school, the English teachers are like, they're all using chat GPT.

Like, this is where the cheating starts. And if you don't, if that starts to get normalized through your life, all of a sudden you're 28 years old buying stocks, it's the same behavior. So it's, I was going to say the chat GPT thing, it's, you know, it's funny about that. I heard a, whatever, it was like a TikTok or something where there was this, where she said, you know, they send out the assignments, you know, to the kids, whatever, you know, they shoot about through email or whatever they do. And so she said, what the kids are doing is they'll just highlight the whole thing and they'll put it in chat, GPT and put, you know, write me a paper on this subject. And then it spits it out. So what she does is, she said, I end up putting somewhere in there between the paragraphs or, I think. the end of the paragraph or beginning, she said, I'll write something completely erroneous in

there about, you know, make sure, and relate it to, you know, Brahm, Stokes, Stoker's, Dracula, or just some, and she's, then I highlight it and I change it to white. So that if you're looking at it, you can't see it. But when they highlight the whole thing and they drop it in chat GPT, chat GPT says, oh, and I have to relate this to Frankenstein or Dracula or, but, geez, and then I get these papers that are like, yeah, you know, They start throwing in these references. She's like, the kid doesn't realize it because he thinks, oh, it's fine. Yeah.

They drop it. They're not reading it. Or if they do, they go, okay, well, this must be related. Yeah. And she's like, oh, I'm catching them left and right. Yeah. Yeah. Or some teachers will be like, here's what chat GPT has is the answer.

I'm giving it to, now you have to add on to that or something like to get around it. But, yeah. I guess this would be my last question. So you kind of went, I guess, you know, extended period of time where you're kind of in limbo. And you're, you know, probably at the lowest point of your life. what do you think it was for you personally or what kind of advice would you have for somebody who's kind of going through something similar or kind of at the lowest point of the life like what was it that helped drag you out of that and overcome it I guess yeah again going back to this idea of shame and guilt I don't think shame helps anybody so like you're not a piece of shit stop stopping yourself up and I think you can only have what I call like windshield mentality like you could only look forward you can't be looking in the rear of your mirror about what you did like you have to learn from it and so start making like good decisions now like you You can't, and it's easier for me to say, then do it because sometimes I do still feel like, why did I do that?

And so, but you have to look forward and, you know, you have to find people in your circle. I think that are going to support you and you figure out who your true friends are and lean into that. But I also say, you have to lean into the suck. Again, we were talking about before. Some of the guys like us will want to clean up their Google and not have this be a part of their life again. But I think it's important to lean into it and to do something with it.

So all my information is tipperX.com. Now I have that trademark. I'm happy on that Tipper Y, I guess. I don't know. So it's TipperX, T-I-P-P-E-R-X.com. And for any companies, I'm on LinkedIn, too, so happy to connect, you know, on there. That's probably where I'm busiest. Hey, I appreciate you guys watching.

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