The Jordan Harbinger Show - 918: Tom Hardin | Tipper X: The Man Behind Wall Street's Biggest Sting

Episode Date: November 7, 2023

How did Tom Hardin go from insider trading to becoming Tipper X, one of the most prolific informants in securities fraud history? Join us as Tom tells all! What We Discuss with Tom Hardin: The factors that led Tom Hardin toward the temptation of illegal insider trading. How the FBI caught Tom — even when he thought he was playing "smart" — and got him to become Tipper X, one of the most prolific informants in securities fraud history. The art of wearing a wire, maintaining silence even among family and friends, and other struggles of an FBI informant. How Tom's work helped bring insider trading to the forefront of public attention and led to increased enforcement efforts by the government. What the public aftermath of cooperating with the FBI looks like — from risk of retaliation by former colleagues to social isolation, psychological distress, and legal ramifications. And much more... Like this show? Please leave us a review here — even one sentence helps! Consider including your Twitter handle so we can thank you personally! Full show notes and resources can be found here: jordanharbinger.com/918  This Episode Is Brought To You By Our Fine Sponsors: jordanharbinger.com/deals  Sign up for Six-Minute Networking — our free networking and relationship development mini course — at jordanharbinger.com/course!  Like this show? Please leave us a review here — even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Coming up next on the Jordan Harbinger Show. I just started confessing. Like, yeah, I did it. Like, and then they were writing it down. What else did you do? I didn't say prove it. It's the worst day of your life because the FBI is in your face. They said you can only tell your wife.

You can't tell anybody about this. You have the opportunity to help us build some cases. Do you know what insider trading is going on Wall Street? I'm like, basically, yeah, who's not doing it? Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets and skills of the world's most fascinating people

and turn their wisdom into two practical advice that you can use to impact your own life and those around you. Our mission is to help you become a better informed, more critical thinker through long-form conversations with a variety of amazing folks, from spies to CEOs, athletes, authors, thinkers, performers, even the occasional former jihadi investigative journalist, extreme athlete or music mogul. And if you're new to the show or you want to tell your friends about the show, I suggest our episode starter packs as a place to begin. These are collections of our favorite episodes on persuasion, negotiations, psychology, geopolitical,

disinformation in cyber warfare, crime and cults, and more. It'll help new listeners get a taste of everything we do here on the show. Just visit jordanharbinger.com slash start or search for us in your Spotify app to get started. Now today, I actually decided to have my team use chat GPT to write this intro. I'm not sure what I think of it because the format's a little bit different. So if you've been listening to the show for a while, let me know what you think. It was easier than writing my own, although I'm on the fence. So picture, if you will, it is the morning of a normal workday for you in New York City.

Many of us are early risers to get a head start. Perhaps we would have gone to the gym or ran some errands before getting to the office. Now, imagine you're going about your routine and completely, unexpectedly, two FBI agents approach you, flash their badges in public view, and begin questioning you about activity at your job. You're a trader on Wall Street. The agents begin spitting out details about your personal life. They know where you were last weekend. They know private details about your family.

Your heart is racing. Confusion sets. What is happening? Then it becomes clear. Those trades. those innocent conversations, the snippets of info, they were not supposed to find out. The dollar amounts were so small. How could the feds know?

This scenario may sound like a scene from a movie, but this exact situation did happen, and it happened to our guest today, Tom Hardin, and the series of events that led up to this would change his life forever. So here we go with Tom Hardin, aka Tipper X, one of the most prolific FBI informants in the history of financial crime. I do have to say it does take courage to sit here and talk to me, the people you speak to regularly about, well, a legal failing and an ethical failing and just wear it on your sleeve all the time. And I want to bring that out first because I think it's really

easy to talk to somebody and be like kind of judgmental about somebody who's admitting to having committed crimes. It's probably not a great feeling to do that. You know, for the past seven years now, pretty much every week I get in front of a group of people, a complete group of strangers and tell them the worst thing I've ever done. And so it's a non-traditional path, I think, to speaking of corporate training where sometimes I'll walk into the room. I can kind of feel people are judging me. Why do we bring this guy in? It's going to glamorize it. And then as I tell the story, which we get into, just how I rationalize my decisions where I was as a young professional, how my boss looked the other way. I think people are sort of shocked and they're empathetic.

And I think they have gratitude at the end. Like, thanks for sharing the story. But it's not the easiest path to be on. But for me, it's sort of being totally accountable for what I did. And I continue to hold myself accountable by doing this pretty much every week for the past seven years now. Tell me how you grew up, because I think a lot of folks are going to wonder, you know, is this scrappy street kid who brought his street ethics with him to the financial sector? How did this, what's the generation of this? Yeah, so grew up 80s and 90s kid in the suburbs of Atlanta's father was a Coca-Cola man there, his whole career. I had two younger brothers. mother ran a daycare business in our home before there was regulation. So we had 12 or 13 kids

everywhere. And myself and my brothers had to watch over and help her. And so public high school outside of Atlanta in Gwinnett County back in the 90s, the mid-90s, I'm applying to colleges. And back then you just applied to three, your reach, your middle. I remember those. And your safety. Yeah. Like, well, I hope to get into all three of these and then it'll be a tough decision. And then when you don't get into any of them, that's when the panic attacks begin. Yeah. And so I knew I wanted to do business. And so I, I love. looked on before there was the internet really. I saw there was the Wharton School of Business, but my guidance counselor told me at high school, that's just an MBA school. Right.

And my father actually looked it up, went to the public library and said, no, I think they have a undergraduate program too, and it'll be a long shot. That's Ivy League. So I figured what the heck, I'm from Georgia, maybe there's a quota for people from Georgia. And so applied early, got waitlisted, which really lowers your chances, and then got deferred. And so every week, I'm sending the admissions officer, here's my latest AP test, and then finally got in. I'm getting, my PTSD is getting triggered because I have the same thing happen, wait list. And then you're like, well, that means that some people get in off this, right? And it's like, well, this is the don't hold your breath list. That's right. You're like, how do I make myself more

competitive? Brutal. So were you kind of an Alex Pete Keaton, Wharton guy where you're like checking your stock portfolio in the morning before class? Not so much. Like growing up in Georgia, most of my friends, they're successful parents who were sort of like tax attorneys that I looked up to or CPAs. And so I was thinking more of the accounting role major when I got to Wharton. But then after freshman year, I was enamored by people who had been trading the stock market since high school. We're always talking about it. So by sophomore year, I kind of looked at how do I get to the hedge funds? How do I get to that role? And they usually start in these sort of investment banking programs where it's the classic 100-hour work weeks or doing nothing until 5 p.m. that day. And probably

knows it a former attorney, too, where they put it on your desk, get this done by tomorrow. It's like, I wasn't doing anything all day. And so after three all-nighters, I didn't even realize that somebody was like, you know, you're crying. I'm crying. And so a friend from a hedge fund in Connecticut called me around January 2000 at the top of the tech stock boom, the first tech stock boom. com.

Hey, I'm at this tech stock hedge fund in Connecticut. And I was going to serve out my two-year sentence at the investment bank analyst program. But then that sounds a lot better following the stock market. If I can do it earlier than what I plan, it sounds a lot better than what I plan. And it sounds a lot better than doing these all-nighters. So I left Southern California there for a bank called DLJ, where I was working and went to a tech-focused hedge fund in Connecticut. Tell us what hedge funds are. I don't think a lot of people really know what those are.

Oh, sure. So hedge funds are pools of capital. Investors are usually endowments, like university endowments or pension funds where those larger entities will have maybe 10% of their portfolio that they can put in what's called alternative investments. And so these are either hedge funds or private equity firms. and hedge funds differ from mutual funds and that hedge funds not only charge a asset fee on the amount of assets that they manage, so it's usually one or two percent of the assets they manage to cover overhead. Then the incentive that's great is they have a 20 percent performance fee on the profits. So if you are up, you know, whatever million dollars that year, you get to keep 20 percent.

So it's very much what I liked about it. It was a meritocracy where I'm 22, 23. If I pick great stocks, I'm going to be compensated for that. I don't have to play politics here as a young professional. There was 12 analysts at this firm, and it was sort of like an NBA team where you're going to perform every Friday. We had a masseuse come in and work us out because we're performing, picking these stocks, but if we don't perform, we're out. And so we understood that as high risk, high reward. But I loved it. If you pick the right stocks, you're going to get compensated. There's no BS. There's no politics. That's unusual, I think, for any sort of early profession. So at this point, your position to be kind of, I hate this phrase,

Wall Street player, make a bunch of money, that must have felt pretty good. Did you feel like you had forward momentum? I definitely felt like I had four momentum at that age where I was. Just being able to do this for a living, it felt great. I mean, it was a lot of pressure, but I also was comfortable with that. And I read in college about the people that made the most money every year in those lists. It was always these hedge fund managers, George Soros, at the time, Julian Robertson, these big names made millions and millions every year. So I thought that's going to be my path

in my 30s and my 40s. That's the kind of money I'm going to be looking at like life-changing situation. And so I'm on the path. So what was the tipping point that pushed you over the line? Were you investing more long-term? Yeah, we were investing more long term. So fast-forwarding to the first hedge fund that was at closed down in 2002. That was the first sort of dot-com crash. And the hedge fund manager who ran the firm was in the 30s. I made a bunch of money in the 90s. It's like, I'm just closing it down. So I went, took a few small analyst jobs around the Wall Street until I found the place I wanted to be in 2006. I was given a junior partnership position at a newly launched tech stocks focused hedge fund. So at 28, I had a percentage of the profits as a partner and the potential to build a much

bigger firm. We were investing over a three to five year horizon. So back in 2006, the trade that I never saw to fruition was after the Google IPO, after Google was public for a few years, you could kind of figure out that the yellow page companies were probably going to go out of business at some point. And so I forgot to mention earlier, hedge funds can be long stocks, but then they're going to go up and short stocks, but then they're going to go down. And so the career tray would have been long Google, don't touch it, and short these five yellow page stocks, which are probably not going to be around at some point. So that's the kind of thing we were looking at. It's not going to happen in 2006 overnight, but it will happen over a few years. So we're investing that way. We're thinking

thematically. But I also became aware that other players in the industry were playing very short-term, what would happen is there would be other tech stock focused hedge funds that would hire investment analysts from Silicon Valley companies who could call back to their old contacts at the companies and get what's called inside information. Go into what that is. Yeah, I think we should start from the perspective of somebody not having a clue what insider trading is, for example, because having inside information almost always sounds like a really good idea.

Right. The problem is when you're investing with it, it's literally, illegal. But I don't even know if most people know that. I think if you're outside the finance industry, you just think like, wow, what a lucky break that you have insider information that you can use to trade stocks. I mean, it seems like this is the ticket. Yeah. And up until 2006, 2007, which we'll get into it, it really wasn't prosecuted too much at the level of the hedge funds. It was usually sort of one-off. So insider trading trading stocks on information that's material. So if it became public, then it would move the stock price.

So number two, it's non-public. So if I'm walking in my town in New Jersey to Starbucks and I say, hey, manager, what was your revenue this quarter? And he tells me it's not material, even though it's non-public because if I know Westwood, New Jersey's Starbucks revenue that quarter, I can't place a trade in Starbucks stock. But if I fly to Seattle and play golf with Howard Schultz, like Howard, what did you do this last quarter in revenue before it became public? and he tells me, then I can place a stock trade because Wall Street analysts have their own expectations of what a company like Starbucks or Google is going to report. And four times a year, companies have to disclose this to the public. Here's our revenue and here's our earnings. And if you have that information before the public, you can place your long trade or your short trade if they're going to miss or beat

the estimates from Wall Street. So if you were to have this information before everybody else, then you can make profitable trades. And this can be a little bit. It gets dicey, right? Because it can be kind of innocuous. And I'm not going to ask you for a hypothetical here, because I know you're not a lawyer. But it can be pretty almost innocent, right? You're playing golf with Howard Schultz. He's in a really bad mood. What's your problem today? These idiots, they screwed up this. And now you have to have an earnings call tomorrow. I'm getting my ass chewed out by all of our investors. Well, the earnings call is not going to go well. I should trade on that. That is also, even though he didn't say, oh, our revenues are down. I'm not looking for it. You can read between the lines. He did tell you. And you. And you you both had a reasonable expectation that you might trade on that information. I think that's the key, right? Yes, it's a reasonable expectation. And it's also quite nuanced. Like you said, it's usually not, hey, Tom, here is my revenue last quarter and here's my earnings per share. Here's the spreadsheet. Here's the spreadsheet. Right. It's usually, and my job as an analyst was kind of to grill these management teams. And I meet with them every quarter at conferences. And then if you're the CFO of a

company and I've known you for six or seven years, you know me, we're sort of like friends now. And hey, how are things going and you're sweating? You're like just looking at me. I can be like if we own the stock, sell it, or short the stock because every other meeting I've had with you over the years, you're not sweating, you're going on vacation, and your quarter just ended, okay, things are good. It's not inside their information, but it's like, that's my job as an analyst to be able to vet that information from you and those, not, here's the information. But if you're reading someone's mind at that point, how much culpability does that person have? I guess it depends why they sat down with you. If you're just college buddies and he didn't say

anything, but you saw he was in a terrible mood, that's probably one thing. Yeah, you're okay. And most of these situations today when I talk and what I do is a guest speaker for compliance training, usually when that comes up, I tell the analysts to go talk to compliance because you're not trying to commit fraud if you go to compliance and say this is what was happening. He's sweating. He said something that wasn't the numbers, but it was enough where I'm not sure what we should do. And that's why you're not going to be in my situation if you're going to compliance. Right. So your situation, let's get into that. How did you take the first step into the gray? Because if you're investing long term, why do you even need insider information? You're just

Google's going to be good, yellow pages are going to be bad. No offense. Not super genius levels of knowledge required to know that the internet is going to displace a giant piece of crap book that nobody uses that's 800 pages long, right? Yeah. But other stuff more short term, different story. Right. So in my second job as the junior partner, our first quarter of investing, we lost money. But Jordan, really should have mattered because we were investing over a three to five year horizon. We only had about half the money even invested. We were waiting to find what's called entry points when the stocks were at levels we'd like, we'd slowly invest. After losing money in the first quarter, my boss came into my office and said, look, I know we're investing long term. We just

lost money in the first quarter. We have to start looking for shorter term opportunities to make money every month or after our first year. If we're down our first year, that's not good because our investors are going to take their money out. So the goal went from three to five years to make money every month. So I think one sort of moment here is if any goal, I think really any business goes from longer term to short term, the opportunity to do something bad certainly increases. And I'd also say that ambiguous message from the boss to me to do what it takes and now me not asking clarifying questions, do you mean anything goes like these other guys are doing, or are we going to have some ethical legal guard wells around this? I didn't ask the clarifying

question that situation. I would imagine it was not something like, hey, I've got this idea to do bunch of illegal shit and make a bunch of money. Yeah. Like, I never really thought I would be in possession of this insider information because I didn't have the context inside of these technology companies who were leaking the information at the time. At the time, 2007 and 2006 were talking 60% of companies before they were bought, the stock prices went up well in advance. So that means information is being linked and all the attorneys, the accountants, the banker are working on this transactions that information can leak. I know it's going on. There's now pressure to make money every month. Maybe. Maybe.

it's anything goes we used to call it. And then a few months later, I got a call from another investor. So this is March of 07, who she used to work for a guy named Raj Raj Rajaratum. That's a pretty big name in sort of the insider trading prosecution history. Sri Lankan billionaire went to prison for nine years, got out a few years ago. She worked for him. She's like, you know, everybody's doing this, which we could talk about that rationalization. You made me a lot of money, Tom, over the last few years on these great sort of Google Yellow Page ideas. Thank you for that. that's going to play out. I have something for you, Tom, but you can't tell anybody. And she said, now there should have been a red flag there. What are you? Yeah. Well, this must be totally above

board if I can't tell anybody. So let me listen to this. And she said a Moody's analyst. So there's, not to be too technical, there's just two bond rating agencies who rate corporate bonds, Moody's and S&P, who has this information, who was roommates with her cousin. So we'd have to sort of get the whiteboard here. Yeah. Tie the strings and the photos. Exactly. Told her that this company chronos, a tech stock, is going to be acquired in a few weeks. Here's the date, Tom. Here's the price. And here's the private equity firm who's going to buy the stock. Now right there, that sounds like illegal inside information. So I continue to hear her out. And she gave it to me. And we kind of, went through there, hung up the phone. And now I knew this woman to be sort of what I'd call a rumor monger.

There's a lot of rumors in Silicon Valley in the stock market. She calls with these things. Half the time, it's a rumor. It's not true. But the information sounds so spableness. specific, on the first day, I didn't make any trades in the stock. Because to me, at least with my moral compass still intact, this is illegal. Now, I also sort of thought, I should probably end this relationship, too, if this is the way this woman is digging up. Yeah, never call me again. Information, yeah. And so, but I was intrigued. I never had sort of the answers fall into my lap to the test like this. And then later that day, a friend calls me from another firm. He's at what's called a prop trading firm. So you only get paid that month of his firm. If you're up,

he's down. He's like, dude, are you hearing anything I could put a short-term trade out there? This woman just called me this morning, Moody's analyst, Kronos in a few weeks. Now, just right there so people know I've actually broken the law at least civilly by tipping this information. I haven't even traded yet. The SEC, who has civil enforcement, could come in and actually sue me for what he makes. I don't trade it. I say, if you want to trade this, I'm not going to do it. I don't do this kind of thing up to that point. He hangs up the phone apparently blast it to his whole firm. Call options are moving into stock. So this is if you're going to make a leverage bet on the stock, I want to make a bunch of money, you buy options. Call options start moving. The stock starts

going up. He calls me back a few days later. Dude, we're all in. Did you buy any yet? And as the junior partner at my firm, so when an employee commits fraud, it's usually the fraud triangle. There's a need to commit fraud. So I didn't really have any need in my life other than my goals became very short term. So maybe that's a need. There's a rationalization, which we can talk about. And there's an opportunity to commit the fraud. So at my firm, the opportunity was I could buy a stock in our portfolio and not have to talk to the boss as long as it was less than 1% of the assets we managed for clients, like a very small position. Right. So I calculated and felt, I think I was having a little of FOMO too. Like, these guys are making money off this information. Yeah. I'll buy a lot less than

them, but I know that they bought the amount of shares he told me that they're buying. Like, I'll buy a little bit, take some crumbs off the table, and nobody would know. And if my boss has a problem with this, if his directive to me was like stay within the law, he'll sell the stock before anything happened. So I bought a 0.9% position in my rationalization was, it seems like everybody's doing it, who am I hurting? Right. I'll do it just this once and never do it again. Years later, people say, what were you thinking? It was all a very slow, slippery slope. Like, this is how I rationalized it. Sure. No, that actually makes a ton of sense. Okay. Okay. You play small, you mix it in with a bunch of other stuff, doesn't look too greedy,

you kind of assume that you're safe. But the environment around you was what? Everybody else is really doing this. It wasn't just something you told yourself. It was seemingly it was something you actually knew was the case. It seemed like it was not even being prosecuted. At that time, they were looking more at these boiler room selling Granny penny stock scams. They weren't even focused on hedge funds and insider trading. And these bigger billionaire guys were doing it. And so I felt this would be like dropping a rock in the Grand Canyon. Like, nobody would ever. my own small little trade. Wow, man.

It's kind of like doping in sports. If you're the only guy on the team doing it, it's a little weird. Right. But if all the other top hitters or whatever in baseball are doing it, pitchers, whatever, then it seems like you have to do that, but also it seems accepted because surely everybody kind of knows and looks the other way. And then it becomes sort of ingrained, I guess, in the culture of what you're doing. Yeah, it's so much the culture, like, if you were that told me when I graduated from Penn,

you know, a few years later you're going to be insider trading. I would never do that because I'm a good guy. But then when you're desensitized to the culture and everybody's doing it, you can get inside your own head pretty deep and convince yourself. I went home that day after buying that stock committing securities fraud. And I woke up that morning, had my normal morning not going into work saying, I'm going to break the law today. And it was just a few keystrokes.

And it's not that you went and stole the answers from the teacher. Someone called you and said, hey, I got the answers. Do you want them? Yeah. And you just didn't say no. So when I speak at university today, I say imagine it's coming up and you've got the multiple choice and it falls right there in your lap. Are you going to throw it away? You're going to take a peek. Yeah. Oh, man. That's tough. This starts to grow, right? Because it wasn't just like,

wow, this really nice lady's calling me with all this free information that I'm required to do absolutely nothing for in return. How did it escalate from there? Yeah, so she calls me, I placed the trade. It was maybe another week. It's a Friday morning. So it's March 23rd, 2007, to be exact. before the stock markets opens at 930, I'd meet with my boss to go through our portfolios or anything news. Should we buy, sell, whatever? And so it's news on the Bloomberg newswire. I see trading in this stock is halted, which means news is coming. Word for word, exactly what she said. So I'd love to tell you here, I had some moral epiphany, like, because I was sort of telling myself, maybe it's a rumor. She's full of it. No, I went in. I kind of felt like in adrenaline rush, I haste to say,

now I'm part of this illicit in group who has this information. I wanted to say today, I'd love to rewrite history and say I was disgusted. I did this. But at the time, I thought, now I'm part of this illicit in group. And a few minutes later, she calls me and says, did you see it happening? It's on the tape. I said, yeah, I saw it. She's like, I hope you load it up.

I'm like, I bought a little bit. And she's like, oh, my entire personal accounts in this. I remember thinking it's probably not great that your entire brokerage. Yeah, it looks a little. Nobody's that sure about a stock ever, unless they are. And then she says, you know that Moody's analyst, I told you that gave me the information. I said, yeah. She said, Tom, I gave him your name, and I said, Tom, can you write him a check for $10,000 for this information? And you could imagine what I said. What? A lot of expletives. Like I rationalized the trade, but I'm not going to give this guy a check. Are you kidding me? But she said, he's going to have more like this. If we want to keep them coming, I have to take care of this guy. And so I said, let me think about this. I called my friend who the entire firm bought it. I said, this is the situation. Can you pass some cash around? I'm not going to write a check. And my scummiest moment, one of a few, I think, is he gets this cash together from his firm.

He meets me at Grand Central, slides me to FedEx envelope. I'm going out to meet this Moody's analyst in New York. He's on the sidewalk, and he says, are you, Tom? I just held up the envelope. I didn't look at him. I kept walking. And I remember thinking, it's a weird thought I had. When I'm walking back to the office, I thought my grandparents would not approve of this right now.

Right, yeah. And that's always a good test, actually. If you're at that slip-free slope or that area, what would you ask yourself? If your grandparents read this in the Wall Street Journal Marr, would they be happy with what you're doing? Yeah. Wow. That's a big jump. Yeah.

Right. You go from, all right, I guess I got this tip. Wow. It looks like the tip was legit. And then she's like, by the way, we need an envelope full of cash delivered anonymously to this guy who, by the way, knows your name. I mean, I would imagine at that point, are you not thinking, why did you tell him my name? Yeah. That's what I was asking her.

I was, I'd always expletive phil tirade. I'm usually a calm guy at that point. Like, why would you give this guy's name? me, and I was so in my head. I'm like, I could have ended it there. What is this guy going to do? Go to the FBI and say, hey, Tom didn't pay me my bride, but I'm not going to touch the cash. These guys will do it. If they'll take care of this, I'll get this done. I kept saying just this once. I'll do it just this one time. That kept going on in my head. I'll pay this just this once. And it happened three more times. She would call. I tell the other guys, I would buy 0.9% position.

The boss was looking the other way every time, too. So that's something where the stocks are are up 30% in the pre-market before with this news that came out that nobody should have known about. I buy these stocks. One of them was Hilton hotels and we're tech stock focused hedge fund. I see. You're buying. You're suddenly buying a real estate. Although he didn't say, like, are you right? Did you stay to Hilton? What's going on? Yeah, like, I really enjoyed my experience at the moment. So we're going to throw in $30 million. Exactly. And so the boss is looking the other way. So again, more of the rationalization, I kind of feel like if he's okay with it and he's the closest thing to a mentor that I had in my 20s, then he would have asked me questions about this.

And maybe he's fine with it because they are small positions. So what happened for trades through 2007.9% positions, the firm made just over a million for our investors. And we managed about 100 million, so 1% for our investors. And we were up 30% before that, so one more percent. There was no reason to have the 100% of the 1 million, 1.2 million. As a junior partner, what I made And essentially what I threw my career away for was $46,000. Oh, man. At 29 years old, that's the price of professional suicide. It's not millions of dollars that you get arrested for.

It's $46,000, was it. That is so hard to hear, man. You go from not even actively seeking the information to maybe seeking the information to bribing somebody for the information. It almost seems like, we'll come back to this, but why didn't she pay? that guy. Yeah. Subsequently, on the next ones, I said I'm never doing this again. I think she, I think she was getting a lot more than the four I got. I think it was going on for a long time. Yeah, like maybe the guy was making a hundred grand. Yeah, yeah. And he had apparently other hedge fund

clients who he was leaking this to. So his little side hustle was getting paid by other people. I just, wow. Okay. Well, there you have it, I suppose. Did you ever have any close calls? I would not want to stand on the corner of the New York. Don't care what neighborhood you're in with a FedEx envelope with 15 grand in it. That's just not a good idea. Yeah. So on the third tip in trade from her, she asked me, so it came from another source of information. There was another trade she knew about and she said, this other person wants $10,000. And so I go call the guys again and this is another person. They're going to have more information from us. I'm already well into this. Like it starts with the first trade and then now I'm doing cash payoffs. It's like called the boiling frog where

you put the frog in the pot of water and slowly turn it up and they're burning the death. I'm burning a death here at this point is the frog in this boiling water. And she says, I have to bring it to her out in California. And so there's $10,000 I have to bring to her from LaGuardia Airport to California so she can give it to this person. We're going to meet at some conference. And so I thought at the time, the TSA machines weren't that sophisticated. I put the money all in my body, went through TSA, got through fine, went to the restroom, took it out, put it in these bank envelopes in my carry-on bag. Well, my flight is called the border to San Francisco.

It was only a few years after 9-11, so the TSA was actually at several gates that day checking carry-ons. And so I thought, oh, my God, they're here for me. They saw exactly what I did through there. They caught me on the camera. They're just going to wait for me and arrest me. And so I said, let's just play it cool. The cash is in my carry-on and walking into the plane. They exert.

We just search your carry-on. The female agent grabs it, touches the cash, looks at the mail, and says, sir, have a nice flight. She looked at the cash and was like, wow, there's a lot of money in here. So I went and sat in the plane and I thought, oh my God, what the hell am I doing? I'm never going to do this again. And so I told the one when I saw in California, I'm never doing this again. You won't believe what happened.

They touched the money. And then years later, one of my speaking engagements, somebody in the crowd said, you know, it's not illegal domestically to do that? Yeah. And sort of the compliance officer was like, how do you know that? I read the customs legislation. Exactly. Yeah.

But it's international. So maybe that's why they, oh, this guy's a gambler going to Vegas or something. 100%. I mean, you can bring, I don't think there's any limit on the amount of cash. you can bring domestically. I would say there's probably a policy that if you have a giant metal briefcase full of $100 bills, they might just say,

hey, just saying that's a little weird, maybe ask him why get something on the record, have the airport police take a statement. But you're right, yeah, it's when you bring it inside and outside of the country, you need that customs declaration where it's like, do you brought more,

any fruits and vegetables? More than $10,000. But yeah, if you're going to Vegas, I mean, some of those poker guys, I think they bring 50 grand. Plus, intent is just the buy-in of the World Series, whatever you said. Yeah, whatever it is, yeah. Strangely, you'd think you could get the money in Vegas of all places, but I guess

depends who you're getting your money from. Yes. Who's staking you. That's true. So got through that, and I told her, I'm never doing this again, this cash payoff situation. And then there was one final tip in trade where there was no cash exchange to hand. When you make these trades, do you seek cover it all, right? Are you like, okay, I saw an article on Yahoo finance that says Hilton is,

undervalued and it's written by some guy when we make our big bet, I can pull that out and go, I just found this piece, this blog post really compelling and I put $13 million of firm money on this thing or whatever. At the time when I made the trades, so the last trade was September of 07. I wasn't thinking about it and she called me in December of 07 and said, Tom, the SEC had contacted her about one of the trades Hilton and she said, I'm going to tell them about Hilton because Paris Hilton's in the news. That sounds like a terrible idea. That's a pretty weak. Pretty bad.

I don't think they're going to buy that. You know she doesn't run the hotel trace, right? Yeah, yeah. And so then I thought, I better have something written up for why I bought these stocks, but it's already, the trades have already happened months ago, and I'm going to write this thing up now. And so I started looking up at that time what was there, and there was actually something where a Wall Street firm said hotels are right for private equity.

And so, hey, that's why I bought Hilton. Or there was a reason for each of these stocks that I was putting in after the fact. Yeah. And so I was trying to cover my basis because people had told me that had been called by the SEC. It's very common for the SEC to call it all in all-time trades and just say, what was your reasoning. And then I was told, just tell them something. There was a Yahoo finance and they'll hang up. Their government regulators overworked underpaid.

They don't want to, you know, they just want to move on to the next one. Yeah. And so I'm like, let me prepare for the SEC if they're calling her. And then January, February, March of 08, nothing happens. Insider trading is rampantly going on. And I think, like, I'm in the clear on those four trades. And we make thousands of trades, so the four trades kind of in the clear until July 8th of 2008. Oof, okay.

You mentioned the SEC called her name's Roomy, right? Rumi, right. If the SEC suspects you of doing something sketchy, they call you and ask you about it? They'll call or they'll talk to your general counsel or chief compliance officer. Okay. They do examinations every couple years on trading around two events in the market, earnings announcements, which are planned four times a year, but merger and acquisition announcements are not planned the public. If you have well-time trades around those, you're going to get a phone call.

Just explain your reasons for why. Make sure you've documented your reasons why you bought the stock. Hopefully you're not doing anything wrong. It happened to be just like coincidental for most people today. Hopefully that's the case. But to your point, if you're legitimately buying a stock and you haven't documented your reasons, you can open an entire investigation at your firm because you forgot to document your reasons for legitimately buying a stock that just happened to be taken over. So it's a real risk for firms to go through the cost of an investigation. if you haven't documented your reasons why. Okay, so how does it all start to unravel?

You mentioned 2008. A few months after she says the SEC contacted her, the SEC hasn't contacted me. I think I'm in the clear. So Tuesday morning, we're recording in the July summer here in New York City, July 8 to 2008. I'm leaving my apartment in Midtown, 6.30 to drop off some dry cleaning

before getting a taxi to the office, 6.30 in the morning, step on the sidewalk. And I hear this guy behind me say, hey, are you, Tom? I thought that's weird, 630 in the morning on New York City Street. Turn around, yeah. And then there was two FBI agents showed me their wallets, kind of just like any

TV show people have seen the FBI. It literally is like that. Come sit down with us. There's a Wendy's at 55th and 8th that's still there. We sat down that. And he's like, look, man, we know about your four trades. We know that you were just down in Atlanta last weekend, Tom, visiting your

baby nephew when he said his name for his baptism last weekend. And my first thought was, I know why they're here. And oh, my God, my dad's going to kill me. You know, what's you going to say? I thought, oh, my God, my wife's going to divorce me. I mean, we just got married and she didn't know about these trades. Sure.

And then I thought, holy crap, this might impact my career. I got everybody going to prison. So it went from dad to prison. And he's like, we know about your four trades. I immediately started making implicating statements. So if the lawyers are listening, you know, what did you just not take their card? And right, yeah. I'll call you.

I need to contact my attorney. No, let me go into a Wendy's. and like confess everything over a baked potato. I confess everything to them. That's right. It was still the breakfast menu, but we weren't eating it. So I started confessing everything. Yes, there was four trades.

In fact, there was these cash payoffs. He's like, oh, that's interesting. Didn't know that. The pen comes out. Click. Go on, go on. What else? What else?

And I just converted to Catholicism. So for me, this was like my second confession. Right. Not to a priest. That was later. Talking to the FBI. I think they were taken aback because usually the initial reaction is Those are rumors. I have my reasons now for why I bought these stocks. I'll show them to you.

And let me take your card. Let me go talk a white collar defense attorney. Yeah. I just started confessing. I did it. I kept saying I did it. And then they were writing it down. What else did you do? I didn't say prove it. It's the worst day of your life because the FBI is in your face. Actually, after a while, they said you can only tell your wife. You can't tell anybody about this. You have the opportunity to help us build some cases. Do you know what insider trading is going on in Wall Street? I'm like, basically, yeah, who's not doing it? At that point, you're like, crap, I just told these guys everything, and they asked me if insider training was going on. Exactly. They didn't know anything.

But they had a big web of names. They pulled out. Right. There was two big targets at the top. And if you could picture it, like I'm at the bottom, like a meadow in this vast ocean of insider trading. Yeah. I assume one of those big guys is probably this guy, Raj, Raj Rajarot, who I suspected was doing it, who Rumi worked for. They full it up and they said, Tom, you have an opportunity to help us with these cases.

It's going to help you out. I took his card and I said, should I talk to an attorney? No, I thought after I confessed, I should talk to an attorney. And they're like, we'll let you know when you can do that. Definitely not how that works, but okay. No, and I wasn't under arrest. I was always, it's always like you're free to walk out that door, but implied in that as a week from now we'll be in the windbreakers at 6 a.m.

with the cameras arresting you. I had seen enough law and order where that it happens. But the female agent, it was a good cop, bad cop. The female put her hand on my hand. She saw I was startled. She's like, the FBI is here for you when you're ready to turn your life around. Talk about some psychological games. You're listening to the Jordan Harbinger show with our guest, Tipper X.

We'll be right back. If you're wondering how I managed to book all these amazing folks for the show, it is about the circle of people that I know like and trust. Somebody always introduces me to these people. I'm teaching you how to build the same thing for yourself, whether you might need a new job, get into a different industry. Who knows, the course is free over at Jordan Harbinger.com.com slash course. You'll build relationships.

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at jordanharbinger.com slash course. Now, back to Tom Hardin. I'm so curious how good it feels to go up to, and sorry, this is at your expense, to go up to somebody you know committed a crime and flip open that badge because you've been thinking about doing that since you were six years old.

It probably never gets old. And you're like, FBI, we just want to talk with you for a few minutes. And then you go and, just sit someone down and they're like, I did it. And you're like, oh, this feels so good. It's got to feel so good. I think they gazed if I was flippable. They call it, so they probably tapped my phone, looked at my emails, tracked my daily patterns of going to work when I got home. And I guess did enough research on me, sort of at the start of social media, so you couldn't look at

those profiles like you can today. But profiled me enough. They probably felt it's six during the morning, we're going to scare this guy. He'll probably flip. He only made a small amount of money. He's probably trying not to get caught. So they profiled me very well where I guess I was very flippable. It wasn't like, guys, let me call my defense attorney on speed dial. It wasn't like the mafia where I don't have a defense attorney on speed dial because they even said I went home to my wife after work. We were talking about earlier. I didn't have any other things on the side. So I seemed like a normal guy. Yeah. Oh, wow. Just sitting at Wendy's sweating absolute bullets.

Yes. Oh, it was like those old Charlie Brown cartoons where the teachers will want, well, won't with that. I'm not hearing it. And I come to, and I think my dad's going to kill me. Yeah. How long was the meeting? So it felt forever.

I think it was about an hour. I was late. The market opens at 930. I got to the office at 920. My boss is like, where you've been? July of 2008, so we're not doing well. Worst market in 75 years. So there's the stress of that.

Yeah, my God, just had a late start today. I take it you didn't tell your boss what happened. No. My face was white, but it was 2008, and my face was white, like, all the time. Oh, man. I don't know if I would have been able to go to, I probably would have sat at Wendy's and just, like, stared at the wall. They walked me out because they said, this is the worst day of your life. We're actually afraid you might step on the street and not try to kill yourself, but you might just be hit by a car because you're so distracted.

So they actually, this is the first time remember this. They actually waved down the cab for me, the FBI waved down the cab that I could get to the office. They probably didn't want to give you any ideas either. Yeah. You're in shock and you're not thinking clearly. you're thinking you're going to go to prison when really we're just trying to scare you into compliance. It may be a future asset for them, which I think would be. Right. Yeah. Oh, man. I just can't even imagine how that feels. So I got to the office. That afternoon, I thought it would be a great time

to like talk to somebody. As I mentioned, I just converted to Catholicism. My wife's about Catholic. It was important to her two years before we got married. That was my last confession during what's called the RCI process. It's a great time to talk to a priest again. St. Patrick's walked there. Really long line for a Tuesday. afternoon. I remember thinking, like, how many people in line were tapped by the FBI? Like, do I recognize, hey, any other hedge fund guys? Yeah, anybody else from Wendy. Exactly. Anybody else on this path today? Got him with the priest, forgive me, father. I went through my whole life story and then I waited until the end and said, and by the way, this morning.

Yeah, he's probably like, bro, get to the point. Do you see the line outside? Exactly. Come on. Or he was like, I just heard that guy's FBI story. Yeah. So got to it. He's like, okay, it sounds like what you're telling me, 99% of your life, you've been on the right path, of your life, you made those trades, you really screwed up. But I said I'm suicidal. And he's like, look, you can't let this 1% of your life decide what you're thinking about yourself and God's here for you. And if they're giving you the chance, he was sort of like legal advice, but from a priest, if they're giving you the chance to clean up the industry, you should probably do it. And so I walked out. I was thankful. I talked to him just to be able to talk to somebody because I had to tell

my wife, that was the only person I could tell according to the FBI. I couldn't tell my parents. But it was easier to talk to a priest at least first to get it off my shoulders and get like, that is my penance. Like, okay, I should go cooperate with the FBI, I guess, but I got to talk to my wife first. Sure. Yeah, no kidding. What do they want you to do? And I assume later on they were like, here's the plan. Yeah, yeah, yeah. So how did that go down? So I waited to tell my wife Friday after work, young couple in New York City, how was you? Yeah, you could wait. I couldn't wait. No, I was having panic attacks, bed sweats. Like, I think, I don't know if I was suicidal, but I thought about going up to this. I even hate thinking about going up to the top floor of our apartment

looking over and just thinking about, like, why do I want to bring this to her, a newly married couple? We're talking about starting a family soon. Why do I bring this on to her? She's going to leave me. So I said Friday after work, I have to talk. She was working at Lehman Brothers in 2008. So she had all the stories up to this point. Friday, how was your week? She would just go on for a while, you know. I said, right, let me go first. I have something that happened this week. And so I said, I get to sit down for this. And I always try to keep it, make her laugh. And so it's a Tuesday morning exactly what happened, FBI. And she paused and said, it felt like forever. She said, wait, say that again. That's not what I was expecting. She was probably thinking

in fidelity or something because I was so serious. And not to the, and not to do. And not She was saying, oh, just some insider trading. There's merely a visit from the FBI on casualty. I said it again. She processed it. She's like, well, you didn't do anything to hurt me. So she was worried about that. But I would say she's collateral damage.

She's no longer married to the future hedge fund manager. She's married to the future FBI informant. And she also said, if they're giving you a chance to clean up the industry, I always told her the industry so corrupt. Yeah. She's like, you should do it, start making doing things the right way. And so I said, okay, Monday morning, I'll call the FBI. So I don't know where the stat is.

I found it several years ago. I can't find again, 85% of marriage is in right there when a spouse confesses they're going to be a felon or having convicted. Really? Commit a felony during the marriage because she didn't marry Tipperax, the future FBI in front of a felon. She married Tom Harden, what she thought was a good guy. And I've never met anybody in my situation who's actually been able to hold in their marriage. And so I'm very lucky that like she stayed with me. It wasn't easy.

But to have her on my side Friday, that was a big thing that if she had kicked me out, which most wives would have been in for the hedge fund, millions not for FBI wearing a wire. So I said, I'll call the FBI Monday. I called them, met them outside to go through kind of a confession of all the crimes I've ever done if they're going to work with me. It's called sort of like a proffer session. Like you're supposed to confess all your crimes, your whole life, if the FBI is going to work with you.

I said it was just those four trades. Really? Even unrelated? Even unrelated? Geez, man. If they're going to put me out as a cooperating witness later and on the cross-examination, they can be like, did you know when he was 17? I told him, like, I was speeding.

They're like, all right, not speeding when you're 17, but like, I was like Napster. I was just throwing everything out there. Yeah. Like, that's okay. That's not. How much Metallica music? We all did Napster. We all rationalized that.

And I was even like online gambling before it was legal in 2003. They're like, that's fine. So I'm like, all my crimes. And they're like, God, what? You screwed up, man. We expected a couple. Yeah, because they deal with maybe not the financial guys, but. Well, actually, even the financials, I mean, just some of the, you know people who commit a lot of crimes.

They're generally pretty awful. Yeah. They're just like, confess something to us, but if it's just Napster and illegal music and, like, speeding, you're fine. You know they just went back and went like, this freaking moron did this. He was fine. He was fine. They might have even felt a little bad. I think they probably did.

This is like a regular guy. There's nothing. And they've obviously done their work on me. Yeah. And so they said, you're going to need to wear this for us. And they held up his fingers like this little device. And I'm so naive. I'm like, is that like a Blackberry battery?

Yeah. Because at the time we had BlackBerry's and iPhones. Oh, I know. were allowed in banks or law firms until it was cleared. And so the two devices. Yeah. And they're like, this is a recording device. I'm like, is that like a wire?

They're like, yeah, it's a wire. You're going to have to wear this for us and get people of interest. Who you think are the worst actors doing this into conversations? And so it's a weird thing because usually is it cooperated with the FBI? You have to give up an insider trading. Probably your friends, like my friend that I tip these trades on. That's a very terrible situation to be in. Do I take a friend down for what I did?

But instead, they're like, who are the worst actors? And I'm like, do you know so-and-so in Silicon Valley? I'm pretty sure this is their business model insider trading. They didn't tell me enough that they sort of none of their heads. They're like, can you build a relationship? I'm like, well, this is like a 48-year-old hedge fund manager. This is a reputation. I'm a 29-year-old analyst, but I guess we talked to the cover story for me to get people

in conversations, me wearing the wireware. It's 2008. I'm looking for an analyst job. Can we meet when I'm in California next to see if you're hiring? And then back in the day we communicated on AOL-I-M. Yeah. So everybody was on. my I am that I messed once. You just ping them and like I'm going to be in San Francisco.

And so the FBI said, okay, this is your first target, this hedge fund manager in San Francisco who the FBI I think knows is doing it but doesn't have the actual fact pattern to actually go after this guy. And so I said, yeah, I can get a meeting ping them on AOLIM, flew out to Silicon Valley. I was going to a conference. So that was my reason for traveling. And then the FBI agent, one of them flew out with me to Silicon Valley to San Jose to set up this meeting with this Hatch my manager who was a big target of the investigation. Man, did they train you at all for these conversations? Are they like, yeah, just go chit-chat and then guide them in the direction of?

It seems like they should train you. There should have been more training because I was kind of thrown to the wolves. Like, it was sort of, they said, create some rapport. Hey, I had the four trades last year. I'm a young analyst. I kind of know that you do it too. But if you're accusing somebody of committing a crime for the first or second time you meet them in the Starbucks, it might be a little bit off-putting.

but I think psychologically, one of your previous guests talked about raising your eyebrows and showing like your carotidottery as trustworthy. I was actually doing that and I know that that's a sign that you might be like a psycho. I don't think I have. Yeah, I don't know. I was naturally actually able to talk to people this way

but it was weird because it was so off-putting. I said, I had these four trades, how do you do it? I'm looking for a job. You know, I could probably get more information. And then the guy that was the target, the Silicon Valley guy, sort of stood up and said, all right, let's stay in touch. I felt he was on to me. I felt that the wire at this point, he must have seen it. Yeah, I was just going to say, does it feel like it's blinking and huge?

And you're like, so, pal, like, living with your collar and like, how about that insider trading we've been doing, making lots of money illegal money? Right, right. It just seems like everything. And there was no training. It wasn't like, I went to the FBI Academy for a week or two to get some training before this. And so I had this really cold thing on my nipple in my front pocket. I just want to get this over with. Yeah. I want to jump to the chase, not bathe them, not like small talk, and then put it in there and then cut back to small talk. I wanted to get right to it as I started doing this. And the FBI agents were sitting at another table in Starbucks, so that was more pressure that they were there. I met them. This guy's going to be there at three o'clock. He shows up. And I think

they wanted to make sure I wouldn't be sliding like a note to you if you're a target. Like I'm wearing a wire. I'm going to ask you some questions. So I think that happens. Maybe because I'm thinking, why do they care? Why do they need to watch you do? Yeah. Because they're not listening in real time. Right. So that's also important. I think today they might listen in real time. But at that time, it was after the fact.

So it's recording it, but they want to make sure I'm not sliding a note. And so I do this. The guy leaves. They're like, how did it go? I don't know, it was my first time. And then we'll listen to it. We'll be back in New York two days later. I go back to New York.

And then I meet them. We're always meeting a black town car. So the windows are shaded right outside my office. And so I'm looking nobody saw me getting into it. Yeah. That seems really. Yeah. It's sort of clunky.

Yeah. And so I'd get in the Blacktown car, and they'd always say, look around. Is there anybody here that you know? Well, if it's too late, I already got in the Blacktown car. People might, so there was, I guess nobody there. And they're like, we listened to it, the first recording, and we got nothing. And I kind of snapped in. I was just sort of tired.

I was just at home thinking to go well. I'm like, hey, guys, it's my first time doing this. I've never done this before, actually. Right. I was comfortable enough to push back a little bit. Like, hey, I knew I was doing something for them now. It's for me, too, hopefully not go to prison, but like. Oh, gosh.

So eventually I got good at it. Yeah. The hardest thing for me, and I think this might be like a negotiating tactic, too, is like be comfortable with the silence. So if I'm asking you the questions, I had these four trades. Like, I think I'm going to have more sources. Just trying to see, like, as a young mentee of you as my mentor, bad mentor, how do you do it?

I'm trying to get my more sources. And then you'll pause a while and then think, and I had to get through that without me filling the silence. And then once the person started talking, they'd usually give enough where it was enough for the FBI. say, that's enough. Thank you so much. On the next one. And I guess they'd approach that guy dropping office directly, whatever that person did and felt these cases. Wow. Okay, so you got pretty good at this. I know, how many conversations do you think you had? So I think it was 48

before I hired an attorney. So I didn't hire an attorney for a year. So I was running, just taking the FBI's orders. I kind of felt like in the end, it would be best if I just took their orders and pretended like I was working for them. And I know we've talked before the episode about Frank Abing now. And I kind of felt like I had seen the movie. And maybe I'll be like working for the FBI like he was in the movie at the end of his journey. And maybe that'll be me is like the next Frank Gabing now. And so this is the FBI even told me this was I was doing this from my country. So there was some like patriotic part of this. The country needs you. The country needs you until they don't, until we're done with you. And then you're going to

prison. And I talked to an attorney. And he's like, again, I was Googling. All I knew about insider trading was Martha Stewart at that time. So I called her attorney. And he's like, you're not going to trial. I'll call somebody else. So there's, there's, Less of illegal bill. Oh, right. Yeah. Call me when you have $13 million to pay my friend. So pleading guilty as a cooperator.

He called the guy. He's like, Tom, you're supposed to take their card and not talk. And again, I'm like, so naive. I'm like, hey, it's my first time doing this. That was sort of a refrain. Yeah. First time, naive. And he's like, how many times you wear a wire?

48? He's like, did you make millions? I'm like, no, the punchline was the $46,000. He's like, they got a lot of flesh out of you for $46,000. But I guess I saved a year of legal fees. I don't know. Yeah, you probably did. You saved a year of legal fees.

That's the way you should look at it. But also you should have hired an attorney earlier, I suppose. Were you still working at the firm? I guess you must have been if you have on all these conversations. So in 2008, 2009 was my cooperation. I was still working at the firm in 2008 the whole time. So financial crisis, having the double life. Again, telling myself, I was able to play mind games where it's sort of like cloak and dagger.

Like, I'm at work by day and then wearing a wire. I didn't know I was tip or X until later. but I have this mysterious life now. It's sort of like I was trying to find anything that would just keep me positive from going back to those suicidal dark thoughts. They weren't saying I was good at it, but I felt I was getting pretty good at it

because then once I had an update, end that conversation, go ahead of the next one. So I just kept bringing them, building these relationships, bringing them people. I rationalized it, how did I wear a wire on these people? I felt if I'm going down for this and this is their business model making millions, like the patriotic thing to do

would be to help clean up the industry. I mean, that's not, sometimes people say I'm a whistleblower, or like, no, that's not whistleblowing. It's like, I'm not going to go do this unless they confronted me about what I did. Sure. Yeah, no, that makes a lot of sense. How was your performance at work, though?

Coming in, probably slept like crap. I don't know if you're really, your heart's into it at that point. It wasn't into it. It was terrible. I was losing money. Early 2009, I left, and I don't think my boss was really missing me at that point. Sort of like, it was a terrible, terrible year, 2008. I'm not focused on my job because I'm just focused on this other,

side hustle. Yeah, you're hobby of wearing the wire. After you left the firm, were you still taking meetings with people? How did you get them to talk if you were already? Yeah, so now it's 2008. I did terrible last year. Like some of the best stock pickers, it was the worst year of the career. So that was an easy thing.

I'm looking around. I'm going to take my time. We call it finding a seat. So I'm looking for a seat. AOLI am looking for a seat to a target hedge fund manager. Can we go meet if they're in New York? It was always Starbucks meetings. And so meet at the Starbucks.

You know, I'm looking for a seat. I'm going to take my time. This episode sponsored by Starbucks were tons of white-collar crime. We started with the golf game in Seattle. Yeah. And so meet there, and then it was an easy cover. Like, I was looking for a job. I knew about the four trades.

I'm developing those sources. How do you do it? That pause would seem like forever I was getting used to. They'd size me up. And then they'd start talking enough, you know, give me a little bit more of that. Or we'd have a follow-up conversations where the FBI was sort of clunky. They'd have me dial a number for recording it and then dial the person. half the time the person would answer and you'd hear click click click and then one guy was like

did you hear that but at the time I just switched to iPhone without the Blackberry because I left my firm I said I just got this iPhone too I think it was the iPhone too yeah I think it's a new thing like yeah so it's so cringe like oh hey maybe when we're secretly recording conversations with criminals we could make it not like beep or click in and out like a 1995 call waiting There was a lot of trips with the FBI to Radio Shack to get new equipment. And at that time, Radio Shack was going bankrupt. I remember thinking the FBI might be the only people keeping Radio Shack. And also, why is the FBI buying equipment from Radio Shack?

That's a little disconcerting. I don't know. But we go in there was one in Times Square near my apartment. We'd go in for a new recording device and they'd pick it off the shelf. We were the only ones in there. Jeez. So, yeah, so if anybody has that recording pen from Radio Shack, it's like, what does this guy have been up to?

Why did you, why do you have that? The only people have seen that with our FBI agents. Right. That's something. Did anybody suspect you? Was anybody like, hey, man, you're asking me a lot of questions about crime, and I met you five minutes ago over Latte's. There was one guy. I think he was probably pretty high up the FBI's list, who I got in 15 conversations over 2008, early 2009.

He'd always changed the subject. So we would pause. I'm not feeling into pause. I'm doing my job, not changing the subject. He changed the subject. I'm like, it's just not going well. And the FBI's like, yeah, this guy's a tough. not to crack. Sunday afternoon, he gives me a call, and he's like, we need to have dinner tonight.

We need to talk. And he lives in Greenwich, Connecticut, a suburb of New York City. I live in Manhattan. On a Sunday night, we need to talk. So I couldn't get excited. This guy is going to confess all these meetings. I call the FBI. They get excited. They're like, he said he's going to talk. I'm like, yeah, let's meet the Grand Central, the train station, give me the wire. I'll take the train out to Greenwich. This guy will pick me up at the train station, and we'll see what this is about on a Sunday. get to Greenwich. He picks me up the train station. He said, Tom, good to see you.

I brought these swim trunks for you. We're going to go swimming in my mother's house. And the Sopranos was Popper that summer. All these ideas were going through my head. But I was so used to wearing the wire. My heart rate was up a little bit, but I'm like, all right. But it's not taped to your body. No, right.

So it's in my front pocket. So clearly this is a game and he must have talked to an attorney and see this guy's wearing a wire. Or he literally just watches too many mafia movies. He's like, how do I do this? How do I expose this guy? Yeah. Let's go swimming. So we go to this old mansion in Greenwich.

He's like, let's go into this room. He starts disrubbing this room. I'm like, all right, dude, this is awkward. I don't even know him that well. I'm going to go in the restroom and change. Yeah. I take the wire out, put it in my jeans, put it in these swim trunks, put the jeans on the bed. So it's the two of us walking out to this pool.

It's so quiet. I saw a shovel against the house, a hole in the ground. Oh, no. Holy shit, this guy going to kill me or something. Right. I saw there was plants. I'm like, right, landscaping. So getting the swimming pool, he grabs a tennis ball, and we start playing this awkward game of catch.

So he is so weird. Horing it on psychologically. And after a few minutes of freaking me out, I'm dropping the ball, literally. Why catch? I don't know. We're playing this awkward game of catch. Let's get warmed up or something. And he said, Tom, I've been acting kind of weird for a while.

Tom, I spoke to an attorney. Here it comes. I have to ask you a question. And I was going to give up my cover. I was so scared. Like the FBI will understand the situation. My life's in danger. I'm going to give it up.

I'm like, what do you want to know? And he said, OK. Has the SEC approached you? And he got his acronym wrong. So I can say, no, not the SEC. And I forgot exactly what he said. He's like, all right, sorry, I just have to make sure you weren't wearing a wire.

And then he starts making implicating statements about all the illicit trades I'd asked them about, but it wasn't recorded. And for whatever reason, the FBI pitches these cases to the prosecutors, and they have to decide to bring the case to the prosecutor who would never brought the case against this guy who was one of the worst actors. And up until a few years ago, he was still managing money for endowments and pensions.

Like, he was still in the game. How much money do you think that guy made? Millions and millions of dollars. It was probably a $200 million hedge fund, which actually today is small. But, like, it was him and one analyst, so I'm sure he kept most of profits. Oh, my goodness. In every quarter, three or four stocks, he would trade perfectly with the information. Yeah.

And I'm just so befuddled. Like the years would go on when I was charged And I kind of got like, why was it me and not him? Like I kind of got in that headspace later. Like it's not fair, but my wife slapped me around. She's like, hey, they got you. They didn't get him. Let's man up and get to figure out your life.

Wow. This is the Jordan Harbinger show with our guest, Tom Hardin. We'll be right back. Hey, if you like this episode of the show, I invite you to do what other smart and considerate and probably good-looking listeners do, which is take a moment and support our amazing sponsors, all the deals, discount codes,

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Now, for the rest of my conversation with Tom Hardin. For me, I don't know what the statute of limitations is on this stuff. Do you happen? I'm not sure. I think for that, for what I was asking about 15 years ago, I think it's passed. I want to say 10, maybe it was 5. I wonder if the civil penalties wear off from the SEC.

They may not, but I'm not. It's a good question. Everything I've learned with all my training last fews, I don't know. Yeah, because basically my point is he may not be out of the woods when they get AI to go comb over that. And they go, ah, okay. So your better chance of getting struck by lightning three times in a week than making all these trades perfectly. That's enough to go after you civilly, maybe not criminally. And you have to give back the money.

And he goes, oops, I have three boats, two houses, three wives. I can't afford that. and then he's broke for the rest of his life. Like, maybe he's not at the woods. I don't know. Yeah. Thinking, perhaps. Maybe.

I actually met his chief compliance officer years later when I started doing the corporate training. And she obviously doesn't know about this. I'm like, I don't think I should go in there. Yeah. It would be awkward. Interesting that he even has a chief compliance officer. Right, right.

Why bother it? Check in the box, maybe. The pool thing is so weird and scary. Yeah, it was right of a movie or, as I said, the Sopranos was a big show that summer. Yeah. And I knew he was on to me. He's doing this. And so...

And, like, he was definitely on it. There's no getting around that. He knew. He just didn't say FBI. So if he had said to the FBI approach you, you would have cracked. I would have cracked right there. Yeah, the wires in your bathroom. I even tried to give him a head.

I said, no, not the SEC. Like, didn't pick it up. Right. He was like, okay. He's like, sorry for that. And it was weird. Like, I just had to make sure you weren't wearing a wire. But I'm also thinking the wires and the jeans in your guest room bed.

Why don't you have somebody, like your kid go through my jeans or something and look for it. But he didn't. Yeah. Well, he's not. Definitely not an experienced, organized criminal. No, most of these people weren't. Yeah. Oh, God.

Did you ever think I'm bringing down these people because of mistakes I made, or were you thinking, you know, these are all bad actors too. I'm just the agent of their destruction? Yeah, the way I rationalized it, like, because I could have the first day told the FBI or come back to them and said, you know what? Okay, you're telling me I have to wear the wire that first meeting. I'm not going to bring people down for what I did.

Yeah. And so I didn't mention friends' names, but they gave me this opening where who do you think Tom were the worst act? And so I could come back to them and say, okay, these are the worst actors. So again. That I also don't like. Exactly. Like it's sort of like the patriotic noble thing to do for the country now.

Right. You know, making lemonade on my lemons would be to take down who I think are the worst actors. And again, try to get in my mind. I'm doing the right thing now. Yeah. And luckily it wasn't like go wear a wire on your best friend or something. That would have been something where I don't think. And eventually it got to a point where they kept asking me for names.

I have an attorney. And they're like, Tom, what about your two friends that you tipped? And I drew the line there. And my attorney's like, you're risking it. You know, they could see you didn't do enough. And then they were done with me. So January 2010, Tipper X is Tom Hardin, was all over, like, the front of the Wall Street Journal when printed papers were still popular circulation.

So when my name came out, like, anybody that knew me cut ties, you know, I'm sure their compliance officers are like, if you know anybody in these cases, cut ties. Cut ties. So in terms of like my name becoming public, only my wife knew. I had to tell my parents, had to tell my in-laws. because they weren't really following these cases and the headline was Tipper X revealed. So if you're not following the cases,

I'm not reading that article. So a lot of people didn't really see it the first day. Do you have a Google alert set up for your name? I did. That must have been a tough morning. Yeah, yeah. So it came the night before. So the night before that printed paper.

Oof. It's like 7.30. And so I went to my in-laws and told them because my father-in-law used to work at J.P. Morgan, so he's going to probably fall on this. I want to tell them first. And so they couldn't tell you before then. And of all things, like, they were understanding, actually.

So that was helpful. Very lucky. Yeah. But my name came out, you kind of figure out who your true friends are. Like I lost 40-something Facebook friends, LinkedIn connections. But then four people reached out from me from Penn that were like, hey, man, I just saw this. I know it's not news for you. It's news for me.

If you ever need to get a drink or coffee to talk about it, I know who you are. And it's not a recommendation to figure out who your true friends are this way. But it actually is how things worked out. So 12, 13 years later, those are some of my closest friends who were there that day. Yeah. So that's how I figured out. It blows up your whole network because people feel like, wait, tip or X is Tom Hardin. Raj Raj Raj Rahatnam, Rumi Khan, Tom Hardin.

Like, what? Hashmo? Yeah, exactly. That guy who was a regular life. Yikes, man. And then, okay, after you get all these guys, you're wearing the wire, your name comes out, is that like the worst day of your life, would you say? That was the second worst day, I'd say, because I'm a stay-at-home dad.

Kind of feel like as a man I can't provide for my family emasculated. Like, my first daughter, Molly, was a few months old then, stayed at home with her. Reporters are calling constantly. It's a 24-hour story, but at the time, it feels like they're going to talk about this forever. Forever, yeah. They're calling, they're calling, they're calling. Somebody comes to the door. My wife, thank God, is still working, so at least we could just pay the basics of the mortgage. We just bought a house and double income right before, right around the time the FBI approached me. And so she's at least holding down the fort.

Jeez, that's so awful. And so she's going to work. She doesn't want to be away. Like, I should be the one going to work. She should be home with her daughter, sure, the maternal bond. So I'm the state-home dad. I feel like a piece of shit. This is happening. She gets home. She's holding my daughter and just crying. The reporters are calling and talking about feeling like the worst I've ever felt as a husband, as a father, as a person. And I can't change what happened, right? They can't change. I can only try to manage this as best as I can, but feeling the lowest of the low.

Yeah. It was probably right there. Like, the wife's holding the baby crying. And it's everything I did to bring them to my family into the marriage. And she's staying with me in 85% of marriages that don't end this way. And it's not clear it's going to continue to hold together. But it's just for now. Yeah.

And the reporters are calling the New York Times reporter put her name in an article. Back in the day, we had this family blog, just sharing news. my family in the South. The New York Times reporter went to the family blog and said, Tom's wife keeps a family blog talking about this and that because they're trying to get a reaction from me. My attorney said, don't talk to any newspapers when they reach out to you, you know, but he's trying to get a reaction with that low, but her name in the articles. So I was pissed, but like, it's all everything I did. It was all self-inflicted. I did this all to my family myself. Gosh. Is the FBI giving you assurances like, hey, though, you're off the hook because of

your help or not? Not so much. They said they would, back when I was wearing the wire on people before my name is public. They said they did threat assessments on every target. But the swimming pole incident, I did not two years later. So my first speaking engagement was at the FBI. And they said, actually, we thought that was a weird request. And the black town car drove up, followed the metro north train up to Greenwich and was right across the street from that guy's house. But like there was a hole in the ground. There was a gun or something. Yeah. So they find your body quickly. Exactly. Exactly. Exactly. Yeah. Yeah. Yeah. And so they said they were there. They felt bad about it, but

guys, we'll feel really bad if this guy gets killed by this guy. Yeah, but you did a threat assessment, right? Yeah, I mean, he hasn't killed anyone before. We looked up his criminal record. He doesn't really have one. Like, okay. I mean, what does that even mean? Threat assessment? They didn't go to his house. They didn't look at his emails, probably.

You know, they? In my large, said they're using me until they couldn't use me anymore. And once they finally got counsel, and he said they've got a lot of flesh out of you for $46,000. And you could probably stop here. And they also told me, Tom, you're doing such a great job. Like, I thought maybe they would hire me again, going back to our previous mention on Frank Gavin.

They were like, yeah, maybe this will be my second career working with the FBI. And the punchline is, no, it's just a cooperating witness that's more a wire until they used you. It's like a weird semi, maybe not abusive relationship, but one where like, it sounds like a lot of relationships, I would imagine out there. Like, oh, yeah, this is my girlfriend or boyfriend. And it's like, well, for now. Yeah, yeah.

It's very temporary. One person has all the cards. The other person has none. So they eventually arrest you, I would assume. So I'm eventually, so January, my name became public December. I pled guilty. And that's very much of formality. So I had to self-surrender downtown at the FBI. But that's like the formality of like, they even apologize. They're like, it's procedure. We have to handcuff you and walk you in. The agent was like, my boss is behind me. And, you know, this is like, we have to do so. Walk into FBI's office downtown, New York City, handcuffed. And then I go get processed. And then I'm taken to the U.S. Marshal's office where I'm processed further. And there's like a small holding cell until they'll give the judge my guilty plea. And like, I'm the only person

that's holding cell wearing a suit. There's like guys in there who know the people here at this office. They're in there all the time. And one guy would tats up his neck looking at me. He's like, hey, what are you in here for? Insider trading? I'm like, yeah, you know. Everybody knows. Yeah. I'm Tipper X. Like, wow, that guy reads the Wall Street Journal. It was really a stupid comment. What did he do, though? Right. Exactly. So he, he, He knew all the people in the U.S. Marshal's office, so I'm sure it's a repeat drug thing or whatever. Yeah. I didn't realize they even handle that stuff.

Yeah, yeah, yeah. I guess maybe like the federal crime. So before you give your guilty plea, the U.S. Marshals come in and do their own thing. He was like, but I won't see you here again. I'm thinking, like, hopefully not. Yeah, I hope not. And I go see my guilty plea and the judge, like, how do you plead? And it says, United States of America versus Thomas Hardin.

Scary. Another humbling day. Like, the FBI said I was like working for them. Like, I'm kind of like an agent. Where's my bad? Yeah, I'm on your side, guys. I'm doing it and it's like good, wait, for my country, but it says your country against you. Yeah.

And so I realized, all right, this is all in my head is self-delusion. And then the assistant prosecutor is there. And in financial crime cases, the standard procedure, the judge says, are the victims present? The young prosecutor says, there's no victims. Talk about rationalization. Exhale. Yeah. Like, what?

No victims. Now, the company's information stole and insider trading. It's not fair, you know, doping, but like, the prosecutor just said there's no victims. And, wow, like, that was a statement. Like, can I get that edged on a piece? piece of paper. I want to show my parents who are really pissed right now. Did you tell your parents that you had to at some point? Yeah, at some point they were flying up to visit my daughter and that was a tough conversation because they feel like they know me as their son and like

it took a while just telling people was the worst because it's like I did it and I can't change what I did in the past and I had to tell them about this and it was it was rough telling my brother's family slowly over time and some people know some people don't for years. Yeah, I would assume now. Yeah, now I'm out there talking about it. Now you're telling everybody who will listen. There we go. We've got the listeners here. Because for years I was a stay-at-home dad, and I went to be a professional speaker, and then the mom groups were like, you have to have a story.

And like, is it the one minute? Like, I'm an ethics trainer. You know, Wall Street. They need their ethics training. Oh, why did you get into that? Here's the thing. Yeah, exactly. But I guess it's, hey, if you're going to be, this is a felony.

So I pled guilty of securities fraud there. Okay. I experienced to commit securities fraud. The sentencing guidelines is based on the money my firm made just over a million. So I was looking at three years in prison. Had I not cooperated. it depends on the judge you get, and you can check judge. Trading's online to see if they're pro-defense or pro-prosecution.

She is pretty neutral. And so we felt pretty good that hopefully I wouldn't get prison, but judges sometimes, especially with like Occupy Wall Street was big. Like, let's make an example of these people. Like, I'm sorry, but you're still going to have to do six months or something just because I have to make a statement to these people in Zucati Park that are like burning it down. Right.

That you're not going to get off. And so they prosecuted all these insider trading cases, but famously never went after the mortgage fraud and all that, because those are harder cases to explain to a Jersey. insider trading. This guy called this guy's got churning. Okay, that's easy. Right. The jury can wrap their head around it as opposed to like, yeah, what happened was, here's 16 different parties that were all kind of complicit. And you're explaining that to somebody who's like, the big short, slow lique when you're trying to explain that to the jury. Like, yeah, good luck.

Did you have to testify in court against any of the prosecution? I never did. I was called in and prep few times to testify, but these people eventually, I think most of them, most of them actually became cooperators themselves. The few that went to trial, we prep for that. But they were eventually, I think pretty much all found guilty. Like 85 people were found guilty. And then there was 32 cooperators like me of the 85. So quite a few people wore the wire. But I got credit with building 20 of the 85 cases.

Wow. I was one off or two off from the major individuals, but because they got them because of me, so you get credit. And to the FBI's credit, they wrote me a very nice, what's called a 5K letter at my sentencing. This is the bad stuff he did,

but this is the good stuff to have some balance on this. So going into sentencing. sentencing didn't happen until like almost seven years after the FBI approached me. It took a long time. That's horrible. I want to highlight that because seven years, let's say six, seven years. So the whole time during that time, you know that you're in trouble, but you don't know whether you're going to prison at all, whether it's going to be three years, whether it's

going to be probation. You just have no idea. And you spend the better part of a decade just losing sleep over that. Just waiting. So 2010, Tipper X is Tom Harden. So forget applying for a job because you have to have to be a job. to check the box. Yes, I have a felony. I'd fill the whole thing out. Please explain. I was temper acts. I was doing the noble thing, the patriotic thing. And they're like, but you still have

a felony conviction. Nope, non-starter. I might need some time off after I start. Why? Oh, I may be going to federal prison for one to three years. But just hire me. It'll look great, Mr. Mrs. Employee, if you hire me, and that's in the newspaper that you hired me, that'll look great for you. Right. So HR has gotten away. My lawyer was like, start your own company. So before Amazon FBI was a thing. I got into like, oh, Alibaba, you could buy these placemats there and sell them on Amazon for a lot more. So it started like, I was sort of one of the pioneers that I didn't stay with it with the FBI phenomenon that people familiar with on Amazon.

Yeah. And then my Alibaba supplier started hijacking my listings. And then a week later or so, this is years later in 2015, the FBI, 2016, actually, the FBI invited me to speak. I was sentenced in 2015 to no prison. It's called Time Served because of my cooperation. And the judge has basically been almost seven years. What's the point of six months in prison?

Plus, I would have liked to think they went, oh, we've already tortured this guy psychologically for like the entire investigation, the entire period waiting for sentencing. If he's going to do it again, it would have done it already, and he's not in a position to do it again anyways. Yeah, and I didn't look healthy. I was an emaciated ultramarathon.

I'm sure. They're like, this guy's going to frickin' croak in prison. We don't need that on it. This guy's running 100 miles a week. Is something wrong? Yeah. Yeah. So the employment stuff, the job search seems really,

almost impossible, of course. It's really impossible. It's almost like the white collar fellow, not to draw a petty. It's almost like I had this incredible upbringing. I should have known what I was doing was wrong versus a violent criminal born into a terrible life situation with one parent or no parents

kill someone. You could almost forget the 15 year old that did that 20 years later they're out of prison and restoring their life and there's many of programs that reacclimate people like this into society that are built businesses. But the white collar guy, Wharton, like he should have known better So it's almost like the stigma.

I don't want to say it's worse, but it should have known better. I think so, yeah. I know I get what you mean. Are you allowed to trade at all? Can you buy in trade stocks on your own or not at all? Yeah, so I can't have any personal brokerage account in my name. Oh, okay. And the only thing that I can trade is actually crypto.

A totally legit above board market. No crime's happening there. And so I don't even touch it because I know if the SEC is now focusing on that, they're going to look at if I was trading crypto. They'd probably look at me. Oh, yeah. I can, through my speaking business, I can have an ETF-only account in my wife's name at Vanguard, so you just think about owning just the SMP 500.

Right, mutual funds. Can't pick stocks. Yeah, exactly. You cannot pick single stocks. And so I think I'd be too nervous to ever be back at that. I would, that was a long-time trade or something. Yeah, that's the crypto thing makes sense, right? You don't want the SEC going, aha, well, we're going to go back and make an example out of,

oh, we have a guy who already got in trouble for this. And then the judge goes, let me get this straight. You did this. And now you're doing this? Like you just talk about federal prison. Yeah, yeah, yeah. No, that's recidivism. Yes, super, super scary.

I assume there were other people that you knew were insider trading never got caught. I mean, you kind of mentioned earlier in the show there was that one guy who made millions of dollars doing that. How many of those guys do you think you know if you had to just ballpark guess?

Right. So I think there was 85 people, give or take, charged. In my mind, the three worst people were never charged. Oh, wow. One of the three is the swimming pool guy. I think what happened is they were managing smaller hedge funds.

And so the dollar amounts on the trades did not correspond to the federal sentencing guidelines. So the more money you make, the longer in prison you go. And so in terms of the FBI and the SEC building cases, they want to have the maximum impact, I guess, on prison sentences. And that's if you're managing a $5 billion hedge fund like this guy, Raj Rajar Rodham, he made a lot more than a few million, he made hundreds of millions. And so that's a longer prison sentence versus these smaller players who had more well. all-time trades, I feel like, to anybody, just because it was dollar amounts that were smaller than some of the bigger fish. Or they got nobody to cooperate on them. So I feel like even

that they got 85 people, like the three worst, I kept checking for their names years later. Where is it? And a lot of it was like, I went through the why me for 46,000 and why not the swimming pool guy? And again, my wife, unbelievable, like tough love. Hey, is like getting anywhere? Hey, did you find a job? Are you looking for these? You crying about that guy. Oh, gosh. That is tough. Yeah, the one decision I made that was good. was who I married. Yeah, it sounds like it. Yeah, I think you got pretty lucky there big time.

She might have also really wanted to divorce you, but as Catholic and was like, fine. I won't. Yeah, yeah. Now she probably is glad that you guys are married. You seem like a nice enough day. Yeah, yeah. We try to be 18 years now, so we try.

Yeah, yeah. Do you feel bad at all about what you had to do? I mean, it's probably kind of a dumb question, but you know what I mean? Yeah, yeah, I know what you mean. I think I struggled over the years, even when I started speaking. just since the 2015 to no prison, I was a vegan ultra-marathon runner and a mutual friend of ours Rich Rull. The producer reached out, so this would be a great episode. So the first time I buried my soul was about a week after I was sentencing on Rich's podcast. Yeah, you sounded

different on that show. I listened to it recently because I was talking to Rich about, I said, hey, I'm meeting Tipper X in New York and I listen to your show. You sounded like a really scared child. Yes, yeah, it was. I felt bad for you. Like, I don't want to be too polished today. And I I think I, to your point, No, don't worry, you're not possible. Exactly. This is pretty terrible. Yeah, yeah, yeah.

So that was like eight years ago, 2015. The FBI agent, who was the boss of the guys I work with, heard that episode because he was also a fan of the podcast. Months later, I guess he listened to it 2016. They call, and I see it's a restricted number. I'm like, this cannot be them again. This cannot be. When the FBI calls you, sort of like, it doesn't say the FBI.

We have no caller ID or something like that. Yeah, so it can't be. And I'm making coffee. my wife's in the kitchen, stayed with me. And I call him, like, hello? Like, hey, it's so-and-so from the FBI. And my wife can see my expression like it's them. And she's probably thinking, what the hell you do now? Yeah, what'd you do now? How did, were you even in a position to screw this up? I was at the Napster. So told you not to download those movies on BitTorrent. Exactly, exactly. And so he's like, I heard you on Richie Wall, great interview. You know,

Tom, you were the youngest guy we charged back in those 85 cases. And the 46,000 was the lowest. I was thinking, are you calling to rub it in? I was trying not to get caught. And I was like, well, that's the whole thing. It was a very human story. Could you come talk to our rookie agents who were building some new cases again around insider treating in 2016, just about what was it like when they approached people on the street dropping off their dry cleaning?

So the first thing I said, well, you shouldn't tell them not to hire an attorney. Oh, sorry we said that. But they're playing a game. They're just trying to build cases. Oh, we didn't say that. I don't remember that. I would never do that. That seems unethical.

So the FBI invites me to speak. So I figured I have nothing to lose. I have nothing professionally going. Alibaba's hijacking my Amazon FBI business. Like, all right, I got nothing. When you say Aliaba, is that, okay, you're buying widgets on Alibaba and you're flipping them on Amazon for a markup. And then the seller goes, oh, I'll take that myself.

I'll take the buy box for a dollar or less or whatever. Yeah, yeah, yeah, yeah. So it's not coming to me. Yeah, copy your sales copy. Exactly. And so the FBI might spend to speak. So to your long answer is a, so I speak very dark presentation, like, still felt like a piece of shit, like awful.

And they're like, go make Lemonator lemons. this is a great story. So I start speaking for free for months at public libraries, like chambers of commerce where it's like 485 year olds, give me a clap or whatever. Just to get practice.

Sure. The worst thing I've ever done telling people every week now. I felt a lot of shame and guilt, and so like shame, just to think about this, I didn't think about the difference. Shames, I'm a terrible person. Guilt is a bad thing.

And my penance, maybe some of my Catholicism is to go talk about it every week. Yeah. And I didn't realize the difference until someday, maybe a year into speaking, They were like, that was really dark. Are you okay?

And the event planner at a conference is like, it was great. It got great reviews, but as an event planner, I always want to make this sure the speaker's okay. Like, you never want the audience to feel like, bro. Yeah. You still have to work some things out. Yeah. Yikes. Make sure that guy, give them a gift card for some therapy after the.

And I never talked to a doctor or anything about this, just my wife. And a priest, right? In a priest. Yeah. Yeah. And a lawyer. And so I was dealing with the shame and the guilt. I still have guilt for what I did because I think like at this point, not that I've cleaned up

my reputation, but I do have a new reputation as a speaker, and I've had to have some professional opportunities to go, hey, could you come be head of training for our consultancy? Because, yeah, you have your story, but you're such a good trainer and hit people. Like, I've actually have opportunities now to do something professionally, so checking the box, the felony is not so much there. But the guilt for me, holding myself accountable every week now for seven years, it's important to me. And it's not so much, I don't think, like, I think I'm happy doing it, but happiness is probably the wrong word. I just feel like, I wanted to go to the grave and think about, like, what are people going to say in the end?

Like, is it going to be the four stock tickers? Right. Or hopefully I'm 45. Hopefully I'm 60 or something and still telling a version of this story and doing it is like the second career. So that keeps me going. But the guilt always keeps me going. It's like a flickering flame about, I just don't want somebody when I speak to

especially universities, they're never going to forget it. And I want them to feel like if you're at that crossroads of going left or right or the proverbial Rumi Khan calls you in your career, this is, I remember this guy's story. And, oh, I'm saying everybody's doing this, whatever. Oh, yeah, he talked about that. It's not worth it. Yeah. Wow. Interesting. If you could go back and not do it and then just stay a stock picker, work at a hedge fund, would you take that chance? I miss the intellectual stimulation of that career. There was nothing like talking about the markets. What happened overnight in Asia, Europe, how is it going to impact the portfolio? The people that

you're surrounded with there are like some of the smartest people in the world. So I miss that intellectual stimulation. So I do miss that line of career because it's really hard to transfer the scales without felonies or not, stock picker going to do something else, Amazon FBA, like it's not really transferable. Right. Like analyzing businesses and that. But I kind of look at it now, like it was terrible to go through, but I'm happy, I think I'm happy it happened.

Like they stopped me after four trades. What if it was five years and four trades a year, 20 trades more than 46,000? They stopped me when they did. They knew they could probably flip me. And then they called me years later and said, come talk about it. Yeah. And so I think I don't want to be cliche. Everything happens for a reason.

Sure. I think there's a reason they stopped me to put me on this path. It had to be kind of a process to realize that your whole life is not defined by this one choice, like the priest told you. Yes, it took years. I couldn't have, 2010 Tipper X's revealed. I couldn't have said, okay, let me start doing the corporate training circuit a few months after that. Now my name is out because I felt terrible going through the shame.

Those were tough years. Yeah, I wasn't ready to go talk about it. Or I didn't understand why I did what I did until I spoke at the FBI. And they're like, go read this, Daniel Kahnman. He got a Nobel Prize about this stuff, sort of system on the system two, thinking how you can react or how you don't react or go read Danny Riali. Why do good people do bad things? Like, that's one of his TED talks or whatever. Dan's got fantastic YouTube talks about why do good people do bad things. And like, the two Dan's at least going through their first two books, I'm like, not that they felt better, but I'm like, I'm not the only one that rationalizes. And you're certainly not. And if I'm willing to do the work to understand the psychology behind it, that's where the presentation, the churning really comes in because the story is not going to get younger. But it's, It's the decision making that never changes, really. I'm on the fence on saying this on the show, and I don't know if you know the answer, but okay, let's say you know back then a bunch of people who are insider trading.

Couldn't you just copy their trades? Is that then insider trading? If you suspect they're doing something shady, but you don't have the information, you just copy their trades. And your fund is you copying trades from people who you suspect have insider information. Is that enough to get you in trouble? Technically, it's legal. Yeah.

But if you're trading contemporaneously at the same time, if you're mirroring shadowing these trades, you're going to get that phone call, at least from the SEC. And if they say, why are you doing it? Oh, I just copy these other funds. I know those guys all do well. Well, you wouldn't say I suspect they're instead of trade. But those guys always do well. Those guys all have.

It's like copying some kids, the smart kids homework. Right, right. Teacher doesn't love this. You're putting yourself in the position to open yourself to an investigation at your firm. General Counsel will come in and say, oh, we've got millions of legal fees because what were you doing if you're a career? But what are my returns like?

Yeah, exactly. That's the problem, right? This is not legal advice. What is the R-O-I, yeah. I'm just thinking out loud. Yeah. Well, thank you very much, man. I really appreciate you coming in and bearing your soul a little bit here on a podcast

in front of a lot of people that could say not very nice things to you on Twitter as a result or email you. I think most people would appreciate this kind of thing. No, thanks for having me on, Jordan. Anybody wants to reach out. I totally own my story now. It's tipperX.com. And I'm on all the socials I am TipperX. Sometimes people call and they're just saying, I'm going through this at work or something's going down.

I'm happy to chat. I've heard a lot of stories. I bet. So now you train ethics, yeah? You want to plug that? TipRex.com is the website. It has all my information there. Usually what will happen is in a regulated industry.

The chief compliance officer will have this annual training every year, which I'm sure people listening have been through check the box training or watch super video. It's so boring. Just to show the regulator, what the industry does. We have this training. We have to do it. And so I come in and share the story that you heard today, but customize it for the client. if it's a financial services firm or healthcare, there's a lot of rules and laws. You can't cross the line.

How do you rationalize it? And I go in and share the story, and it's usually like an hour or more than that, sit down, fireside chat sometimes really customize it. So do that. And I'm also a conference speaker, usually the right before drinks with the interesting life story, just as long as I saw that swimming pool story at the conference and it's their money with. That's a good visual, right? You awkwardly playing catch with a tennis ball, a wet tennis ball, in some empty

house in the middle of upstate New York. Yeah, yeah. I have some slides in my PowerPoint to have the picture, not the actual pool, but pictures that... Yikes. Yikes. Well, thank you very much, man. Really, really appreciate you. Appreciate it. All things Tom Hardin will be in the show notes

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