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The Plight of “Tipper X”: How Tom Hardin Became The Most Notorious FBI Informant in the Biggest Insider Trading Case in Decades — And The Long Run To Redemption

By May 10, 2015January 26th, 202424 Comments

“I am my own undoing. But there have been many positives to come out of it.”

Tom Hardin

This week we explore some very new terrain.

Let’s kick it off with the Greek myth of Icarus.

As the story goes, Daedalus — a master craftsman best known for building King Minos’ labyrinth to trap the Minotaur — plied his talent to construct a pair of wax and feather wings to help him and his son Icarus escape from Minos’ vendetta (it’s a long story) and Crete altogether.

Being the good father he was, Daedalus pled with his son not to fly too close to the sun for fear that the heat would melt the wings. But as sons are wont to do, Icarus ignored his father’s advice.

The rest is history. The heat indeed melted Icarus’ wings, sending him into a deathly free fall collision with the sea which today bears his name, the Ikarian Sea near Ikaria — ironically one of the Blue Zones as described in my recent podcast conversation with Dan Buettner.

As most know, this is an age-old remonstration about ambition. A tragic allegory about the perils of hubris, particularly when fueled by a sense of entitlement, and perhaps sprinkled with a light dusting of denial.

These are all very human traits of course. And if today’s guest is anything, he is quite human indeed.

Tom Hardin was a highly motivated young guy with a big bright future and Wall Street aspirations. After graduating from the prestigious Wharton School of Business, he was on track to achieve his dream when he landed in the fast paced hedge fund world and quickly rose through the ranks.

But it wasn’t long before Tom felt he was falling behind – lacking that mysterious competitive ‘edge’ so many others seemed to freely enjoy (without repercussion) to their reward in untold millions.

What was that edge? If you ask Tom, he will tell you the not so secret to success within the insular hedge fund world meant having a network of inside sources willing to share reliable confidential information about companies they worked for or with.

Everybody’s doing it. Nobody’s getting caught. I’m falling behind.

Then one day Tom got a call from an investor colleague named Roomy Khan – a woman with some pretty juicy insider tips.

The timing was right. Tom was primed. And that fateful moment arose. That moment when you make a decision to take a very small step over a very important line. A decision you simply cannot undo. Not now, not ever.

For Tom, it started with taking a few small crumbs off the table. An imperceptible insider trade here, another one there. Until one day, the previously unthinkable became easy. Almost too easy.

Capitalizing on a handful of secrets fed by Khan and others about companies like Google, 3Com and Hilton Hotels, Tom’s flight towards the sun escalated to the tune of $1.7 million in gains for his fund and $46K in personal profits.

Then in July 2008, while dropping of his dry cleaning one morning, Tom felt a tap on the shoulder. A tap that would alter the trajectory of his life forever.

Like a scene out of a movie, Tom turned to face two FBI agents boxing him in with with a Hobson’s choice – either get in the back of the black sedan for a trip downtown, or start providing actionable information on those higher up the food chain.

Panicked and heart pounding, he immediately opted for the latter.

Ultimately, Tom became one of the most prolific informants in securities fraud history. Soon infamous as the mysterious, unnamed Tipper X, Tom spent the next several years wiretapping and documenting the illegal misdeeds of friends and colleagues as an instrumental, key figure in what the FBI deemed “Operation Perfect Hedge” — a Wall Street house-cleaning campaign that matured into the biggest insider trading case of this generation.

When the dust settled, Tom’s cooperation led to over two dozen convictions, most notably the toppling of billionaire and Galleon Group hedge fund founder Raj Rajaratnam, who was accused of making $75 million personally and is now serving an 11-year prison term.

Due to his extraordinary cooperation, Tom avoided jail time, but did not escape the scarlet 5-letter word: felon.

Although his wife and family stood steadfast, Tom lost his job, his friends, his standing in the community, his dream, his sense of self and what his life was supposed to be. His relationship with sanity started to slip. With right and wrong confused, heavy bouts with depression ensued. His spirit sank in proportion to his expanding waistline.

Today he finds himself unemployable. Racked by guilt. Afraid. And, it can be fairly said, quite alone.

I am my own undoing.

Our culture thrives on schadenfreude. But it’s easy to judge when we’re watching comfortably from the sidelines. Whether it’s a professional cyclist’s decision to dope or a trader’s choice to barter on insider information, we all think we would make a different decision. I know I do.

But I also know that unless I have walked a mile in someone else’s shoes, it’s not my place to say with any degree of certainty what I would have done under similar circumstances.

But that’s not really the question I am interested in. From my perspective, it’s far more interesting to explore:

  • the factors that lead a person towards their own dismantling;
  • the emotional landscape that accompanies such a scenario;
  • what can be learned from Tom’s experience; and
  • the inherent power of moments like these to become reborn

Tragedy can be recast as divine. Not just as an opportunity for a second chance, but as a true gift — a brief moment in which the door cracks open, the light shines in and the stars align to provide a rare opportunity to harness the painful past; learn something crucial about yourself; set a new trajectory; and ultimately transform everything about who you are to become an entirely different and better person altogether.

I won’t say Tom is there yet. He remains unclear on where his life might lead. But his journey has begun — a soulful exploration and search for answers he is slowly beginning to discover through community service; a newly discovered love of ultrarunning; and his simple willingness to entrust me with his story.

I am honored that Tom agreed to sit down with me in March (just weeks after his sentencing hearing) to share — for the very first time on record — the details behind the choices he has made, the wreckage it has caused and what he has learned about himself in the process.

Snitch? Hero?

Maybe both. Maybe neither. Maybe more complicated than that. Probably.

Whatever your take, I applaud the courage it took to engage me in this conversation. Candor, vulnerability and raw honesty are hard to come by, and Tom demonstrates it today in spades. I’m proud to share this exchange and my hope is that you find something compelling about the human condition that will better inform your own path.

I genuinely hope you enjoy the conversation and look forward to your thoughts in the comments section below.

Peace + Plants,


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Production, music & sound design by Tyler Piatt. Additional production by Chris Swan. Graphic art by Shawn Patterson. Thanks boys!

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Follow Tom’s Journey Online: | @iamtipperx

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  • JenCharp says:

    I appreciated your conversation with Tom and wanted to thank you for being willing to step outside of your usual format and bring Tom’s story to your podcast. I also thank Tom and want to express admiration for his willingness to discuss, in a matter-of-fact manner, his very difficult and painful journey. The world of a hedge-fund marketeer is very foreign to me, but his story is as old as time, highlights the common failings of man and thus should resonate with anyone willing to be honest with themselves. As a person in recovery I have learned I can’t afford to even carry stones, let alone throw them. It is so easy to say, “I would never do…” or “At least I never did…” In recovery I hear the phrase “just add the word ‘yet’ to the end of that sentence”. We are all capable of the worst actions and conversely, just as capable of the highest good. I hear contrition, restitution and redemption in Tom’s story and those are the best kind of tales. Rich, I hope you will have Tom back on your podcast in a few years so we can see where his new path is taking him. I believe it will continue to be a fascinating journey.

  • Ann says:

    Rich, the quality that makes you such a good interviewer is your compassion–you make it safe for your guests to be real. I think Tom is right when he says things like this can happen to anyone. I think most people experience ethics as contextual, rather than existing in a vacuum. Tom’s story reminds me of David Clark’s (RRP #113)–the descent down the rabbit hole of lies, and then the journey out that requires both acknowledgement that pre-rabbit hole life no longer exists, and radical personal transformation as the only pathway forward. In both these stories the endurance running seems to serve as a practice of burning away the extraneous, leaving just what is genuinely important.

  • SWSmith says:

    Great interview. Thanks to Rich and Tom for opening up this conversation. I don’t know where else I might find such a blend of in-depth examination and graceful, sensitive consideration of a topic that would often be sensationalized in other media forums. Much nuance and balance here to reflect on. It is like we are seeing the very seeds of transformation just beginning to open up.

  • CM3 says:

    This is one of the best, “where the rubber hits the road” type interview. I think the listener “takeaway” is that there is an element of Tom Hardin in each of us. I wish him the best. The road to redemption is the name of the game in life.

  • Brenda says:

    This is one of your best interviews Rich. You have a very insightful and compassionate approach. I hope you’ll interview Tom a year from now to see how his life has changed.

  • Tommy F says:

    “Out beyond ideas of wrongdoing and rightdoing there is a field. I’ll meet you there.” -Rumi

    Tom has surrendered to the reality of his actions. He’s taken personal responsibility and is on the path to redemption. We’ve all crossed over various lines in our life. It’s part of being human. It also often sets the theme and plot of our journey here.

    Meditate.. Journal.. Run.. Repeat. The light of Forgiveness will shine brightly upon you. 🙂


  • Brendan Lentz says:

    Rich – This was one of the best shows to date! Thank you. Takeaway quote from Tom Hardin’s priest: “don’t let one lapse in judgement define your whole life.” As CM3 says we can all relate to Tom.

    Tom – thanks for having the guts to share your story. Best.

  • alilstrange says:

    I really enjoyed this interview. Rich – I felt as though you created a safe environment for Tom to talk about something that sounded very emotional. Great job! For Tom, keep up the great work with the training, and I too look forward to when you return as a guest again. 🙂 To quote (or misquote, perhaps) Rich, that was a total solid.

  • Helen says:

    Wow, what an amazing interview. Rich, you really were superb in this discussion. So natural, non-judgmental, compassionate and genuine with your questions and comments. I also want to thank Tom for sharing his story. We all make mistakes, some big and some small, but rarely do we have to have them aired on such a large platform. Tom, when your girls grow up, they will be so proud to know you faced this crisis head on, with grace and humility. Peace, plants and forgiveness. It’s time to move forward

  • Joanne Verkuilen says:

    Brave, raw, genuine. I loved this interview on so many levels. Having worked on Wall Street around the same time, I can totally relate to his story. Not that I came face to face with insider trading, but how the pressure to perform would entice you to do something you normally wouldn’t do. Tom, thank you for being honest and open with all of us. Also, I totally agree Rich. Hearing him talk about his new found passion in running…new doors are opening for him and he will totally look back on these series of events with gratitude. Peace Tom, and I am totally rooting for you this weekend! Thank you for sharing your story.

  • Kirk Wells says:

    This was probably one of my favorite interviews to date. Very real and relatable. Looking forward to a future interview with Tom to see where he is with things in life.

  • Kory Cochran says:

    To he without sin, cast the first stone is response to those that might be quick to judge him. I think the real story here is it is a messed up society that puts so much pressure on one to perform that they feel tempted and compelled to “fudge” just a little. Mind that I’m not blaming responsibility on society, but still it’s sad that greed is such a factor of this life of mass consumerism we live in. I’m really glad that there is a movement of minimalism in generations younger than I.

  • Kathy says:

    Excellent interview Rich! Thank you, and thank Tom for having the guts to be so open and transparent and sharing so much. Best of luck to him in all his future endeavors. Your podcasts rock, Rich! I look forward to what’s next every Monday!

  • Grant says:

    I thoroughly enjoyed the interview. Rich, nice job with the format and thoughtful questions. Tom came across like any normal, caring, concerned, responsible and accountable individual who crossed the line of temptation and has learned his lesson. His humility and grace is an inspiration.

  • jeannie says:

    Ok, I did cry at the end of this interview. I was driving and had to pull over. Unexpected and not prepared, the ending of this interview was a moment of grace. Suddenly I was in a circle of truth, faith, willingness, will, compassion, kindness, forgiveness, disappointment, redemption, transformation, courage, encouragement, uncertainty, vulnerability, authenticity, generosity, hope. I had to stop for this sacred moment. Thank you Rich (and Julie) and Tom for demonstrating the possibility, power, and promise of grace.

  • Jeff says:

    Rich, you’ve had a lot of outstanding interviews before, but this one is my favorite yet. It’s raw, truthful, and really cuts to the bone on how we face and fall into ethical dilemmas in our competitive careers. Truly a great listen. Plus the ultramarathoning discussion at the end was like icing on the cake!

  • Jacqueline says:

    This was a very excellent conversation Rich! I enjoyed it so much and I think Tom’s future is bright and full of opportunity. Just wait and see. Would love a follow up. Tom … you may have inspired me to start running … well, my speed might be considered a fast walk, but it’s a start. Thanks again! Great honesty.

  • Mitchell J. Katz says:

    This was a terrific interview. A totally different guest but the discussion was completely consistent with your “mission.” Intriguing, insightful and just well done. Thanks for exploring new territory and taking us along.

  • Julia Hanlon of Running On Om says:

    Hi Rich,

    This was definitely one of the most powerful RRP’s to-date. Your ability as an interviewer to create a safe space for Tom to speak his truth was profound. I also deeply appreciated how Tom’s story featured someone who was facing a lot of uncertainty. Although I enjoy your many podcast interviewees, I found that Tom’s ability to be vulnerable and “in process” shows a different side of the coin. I look forward to following Tom’s journey and am inspired by his commitment to his running and family. Thank you for bringing Tom on RRP!

    Peace, love, and plants,
    Julia Hanlon of Running On Om

  • Cathy Fisher says:

    I rarely listen to interviews all at one sitting, and with this one I kept looking forward to getting back to it more than usual. You had, as always, very thoughtful and researched questions, and I appreciated how you skillfully teased out the experiences he went through for the rest of us, who have no clue what this journey would be like. Fascinating! And loved the wrap-up questions and unsolicited opinion, as well as the suggestion that your amazing wife could share some ideas for rounding out the spiritual arena for him. Well done! 🙂

  • carlagolden says:

    Thank you Rich. You can make a topic that I care little about become a fascinating listen. I learn so much from you and your guests. Tom is someone I would have written off had I simply read the headlines, but to get inside his head, heart, and story is to become Tom in his shoes and judge myself for what I may or may not have done the same or differently.

  • J. Chris T. says:

    Great interview Rich! And many kudos to Tom for being so forthright about a difficult chapter in his life. And that’s what it is: a chapter. Tom will perservere and go on to do good things. Being a stay at home Dad is already one of them. Having spent twenty years in one aspect of the financial services industry, I can relate to the gray areas of ethical behavior and decision making. It is very prevalent in that industry and one of the reasons I no longer have a passion for it. So when Tom said he couldn’t go back to sitting at a desk after his experience and knowing what he knows now, I get it. And finding solace in running….I guess we all can relate to that!
    Rich, when Charlie Rose retires, if ever, I recommend you for the gig! You’re a great interviewer!

  • Jason says:

    Super interesting, but Mr. Hardin seems to make this situation unnecessarily dramatic in my opinion. I’m not talking about the drama of the legal process–that was brutal–but the drama of the ethical dilemma. He didn’t rape, kill, abuse his spouse or kids, drive drunk, endanger the lives of others, abandon his wife and kids, nor was he unfaithful to his wife. He stole, plain and simple. It’s wrong, of course, but he paid his dues so I don’t get the massive soul searching. Congress does worse every single day. And why would he feel bad about helping to bring justice to other wrongdoers? How is that wrong? People got was was coming to them.

  • Dominika says:

    Just had a chance to listen to this podcast. I’m a hedge fund attorney and found it to be very interesting. I applaud Tom’s honesty and can really ‘feel’ for the ethical dilemmas he had to face. It is true that we don’t know what we would do in a given situation unless faced with one. The only thing I disagree with is his claim that what he did was a victimless crime. Market manipulation hurts companies and in turn its shareholders who are “real” people. I think the quicker he owns that, the quicker he can overcome the resentment. Insider trading is a crime for a reason. Nevertheless, I agree that he will come out of this on the other side, happy and alive more than ever. Great, touching interview.

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