February 26, 2026

Episode 398: Tom Hardin - Ethics, Financial Crime, and Redemption

February 26, 2026

Tom Hardin is a keynote speaker, corporate trainer, and founder of Tipper X Advisors, specializing in behavioral ethics, compliance culture, and organizational risk management. A Wharton graduate, Tom spent years on Wall Street before becoming the FBI's cooperating witness known as "Tipper X" in Operation Perfect Hedge, the largest insider trading investigation in U.S. history. Over two years, he wore a wire and helped build more than 20 criminal cases, a journey he chronicles in his memoir Wired on Wall Street: The Rise and Fall of Tipper X (Wiley, 2026).

Today, Tom has delivered more than 600 talks to Fortune 500 companies, boards, and leadership teams across more than a dozen countries. Drawing on hard-won experience, he helps organizations understand how good people make bad decisions, and how to build cultures where integrity holds under pressure.

In this episode, we sit down with Tom Hardin, also known as “Tipper X,” the former hedge fund analyst who became one of the most prolific informants in the largest insider trading crackdown in U.S. history. Tom walks us through his journey from rule-following soccer referee in Georgia to Ivy League graduate and rising Wall Street analyst—before crossing the line into insider trading at age 29. What makes this conversation so compelling is not just the crime, but how ordinary it felt at the time. Tom explains how small rationalizations, cultural pressures, ambition, and the normalization of questionable behavior gradually eroded his ethical boundaries. After being arrested and recruited by the FBI, he wore a wire 48 times and helped build over 20 cases in Operation Perfect Hedge, exposing widespread misconduct across the hedge fund industry. We explore the psychology of ethical failure, the “fraud triangle,” moral licensing, and the difference between ethics in the classroom and ethics in the real world. Tom also reflects on redemption, forgiveness, mentorship, and how he now defines success after losing his finance career.

Key Points From This Episode:

(0:04) Introduction to Tom Hardin, former hedge fund analyst turned FBI informant.

(5:15) Tom’s conviction: One count of securities fraud and one count of conspiracy after four illegal trades netting $46,000.

(6:11) Early life as a rule-following soccer referee and how ambition shaped his identity.

(8:07) The hedge fund world as a meritocracy—high pressure, high stakes, and performance-driven culture.

(9:13) How insider trading networks operated openly in certain hedge fund circles.

(12:21) The legal definition of insider trading: material non-public information and breach of fiduciary duty.

(15:25) How difficult it is to consistently generate returns without some form of edge.

(16:26) The first insider tip—and the rationalizations that followed.

(19:03) The “fraud triangle”: pressure, opportunity, and rationalization.

(22:16) Placing the first illegal trade—and feeling almost nothing.

(24:39) Peer validation and the normalization of wrongdoing.

(28:38) The 6:30 a.m. arrest and being approached by the FBI.

(31:43) Deciding to cooperate—and becoming “Tipper X.”

(36:24) Learning to wear a wire and extract incriminating statements over multiple meetings.

(38:26) Inside Operation Perfect Hedge: 81 individuals charged, 32 cooperators.

(39:28) The chilling effect on hedge funds and the possible decline of illicit “edge.”

(42:12) Being publicly unmasked as Tipper X and the personal cost to his family.

(44:02) Why ethical failures are incremental—not sudden transformations.

(45:11) The gap between academic ethics and real-world psychological pressure.

(46:57) The role mentorship could have played—and how culture shapes behavior.

(50:29) Tom’s view on hedge funds for retail investors: high fees, limited liquidity, and questionable value.

(52:04) Ethical drift, rationalization, and warning signs to watch for.

(52:35) Redemption: Owning mistakes fully and learning to forgive yourself.

(55:02) Redefining success—relationships, honesty, and meaningful contribution.

Read The Transcript:

Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix, Chief Investment Officer, and Cameron Passmore, Chief Executive Officer at PWL Capital.

Dan Bortolotti: We got a good episode today.

Ben Felix: It was a different episode. Now, this podcast, we try to make episodes that are about sensible investing and financial decision-making. This is a bit of a different angle on that, but I think it still very much fits with the theme of the podcast.

We talked to Tom Hardin, who is also known as Tipper X. Tom was an informant for a massive securities fraud investigation. Tom was actually arrested.

I mean, he was an informant because he got busted for securities fraud. We talked to him about his experience, but also it's just a conversation really about ethics and about how the line between what's right and what's wrong can blur, depending on the environment that you're in and the path that that led Tom down. It's fascinating to hear.

I can't remember if I said this in the recording or afterwards to Tom, but when I read his book, I couldn't help but put myself in his shoes. He's in all of these unbelievably difficult situations where he's making really tough decisions. It's quite an experience reading the book and imagining yourself in those situations, especially for me as someone who works in that field. What did you think, Dan?

Dan Bortolotti: He didn't wake up one day and decide that he was going to break the law. He was in a pressure cooker of an environment with a lot of people around him that were blurring the lines about what was ethical and what wasn't. Gradually got dragged into that, made some mistakes, which he is very upfront about admitting and owning, which I think really makes the story very compelling.

And then the other part of the story is we're going to talk about is what happens after he gets caught and how I think he's redeemed himself in the years since then, but a really compelling guy and a great story that I hope listeners will enjoy.

Ben Felix: And Tom does have some great comments near the end about whether hedge funds make sense for retail investors. We very much agreed with what he said there. Tom Hardin spent a lot of his career as a financial analyst.

Then in 2008, as a part of a cooperation agreement with the U.S. Department of Justice, he assisted the U.S. government in understanding how insider trading was happening in the financial services industry. And he did that by being an informant and his code name was Tipper X. He helped to build over 20 of the more than 80 individual criminal cases in Operation Perfect Hedge, which was a massive campaign, Wall Street cleanup campaign that ended up being the largest insider trading investigation of a generation is the way that it's described. He was busted. He made four illegal trades. He gets busted for that.

The FBI approaches him and asks him for their help in investigating other people. They put a wire on him and he's going to talk to other folks in the finance industry about the insider trades they might be doing. It's unbelievable to imagine yourself in that situation, but Tom spends a bunch of time doing this and he's involved very closely in a bunch of those busts.

And then this is kind of the redemption story, the aftermath that you mentioned, Dan. He eventually gets invited to speak to the FBI New York City office, kind of about his experience and about him being an informant and all that kind of stuff. Kind of realizes at that point that he has a really interesting story to tell and that he's actually a pretty good speaker.

And he has made this into his second career now that he can't work in finance anymore because he was busted for securities fraud. That's a one and done type deal. But now he's quite a prolific professional speaker.

He tells a story. He talks about ethics. He talks about professional cultures and how they translate into ethical behavior.

It was really fascinating. And he's got a book coming out in February titled Wired on Wall Street, which Dan, you and I both read to prepare for this conversation and figure out what to talk to Tom about. So that's it.

He's got a bachelor's in science in economics from the Wharton School at University of Pennsylvania. Which he talks about in his story, he never expected to get into an Ivy League and that may have contributed to him feeling out of place, may have contributed to the way he eventually ended up behaving. I found his book riveting, honestly, just because it takes you through an experience that most people will never go through.

And it really puts you in the shoes of someone who had to make a lot of really tough decisions and live through some really difficult times. And I think a lot of that comes out in this conversation.

Dan Bortolotti: Yeah. I was going to say that the tenor of the conversation is very much like the voice in the book. And so I think the two of them really complement each other. So listen to the interview and go out and read the book.

Ben Felix: All right. That's good for the intro.

Dan Bortolotti: Sounds good.

Ben Felix: Let's go to our conversation with Tom Hardin. Tom Hardin, welcome to the Rational Reminder Podcast.

Tom Hardin: Thanks for having me on, Ben. It's a pleasure to be here.

Ben Felix: I'm going to start with a question that we've never asked one of our guests before. What crime were you convicted of?

Tom Hardin: Yeah. So I pled guilty to one count of securities fraud and one count conspiracy to commit securities fraud, which is insider trading. Between 2007, 2008, I made four illegal stock trades, which netted me personally $46,000. And for that price, I threw away my career at 29 years old.

Dan Bortolotti: We noticed when reading the book, early in your life, I mean, you were very much a by the book, follow the rules guy from the way it sounds. And there's even this story in your book, and you can share a little more detail. As a teenager, you were a soccer referee, and you were put in a position where you had to enforce a relatively obscure rule.

But I think it was a good way of demonstrating your commitment to being a rule follower. So I wanted to ask you a little bit about when did you realize that Wall Street was not really a place for that kind of rule following culture?

Tom Hardin: Thank you for highlighting that. Just to start the book, I grew up in Georgia in the 80s and 90s. And by 12 years old, I wanted to get my first job.

And at that point, you could actually be a soccer referee if you could pass the test. That was the youngest age and I passed it. And was really into doing that as my job through high school.

But of course, like you said, you're enforcing the rules. I got to referee, officiate adult league matches. In the over 30 league, you can't slide tackle because it's old people and they could get injured.

And there was a team that was slide tackling and I gave them, I think it was three or four red cards and got chased in my car. There was a language barrier. I was trying to explain the rule and I think they thought I was making it up.

So this is just one story from my childhood where I was really focused on enforcing the rules. And I think as I got into Wall Street, so I got into an Ivy League college, I didn't really think that was going to happen, but I was persistent about bombarding the admissions committee at UPenn back when email was invented really in the mid 90s, just sending them an email every weekend with every random update. And I think they finally just let me in because they were tired of hearing from me.

And so they let me in and I got to my career investment banking. And I really think my first time on Wall Street that I thought the ethical lines were fuzzy were when we were taking a company public 1999. So this tech stock bubble back then, I was working on the financial model as an analyst and trying to adjust the adjusted EBITDA.

And so I'm sure many listeners will know what adjusted EBITDA is. I described it in the book as trying to turn a 200 car pile up into a Disney parade. So you're trying to make it look as good as you can for the client.

And it's all about where our duty is to our client and making their numbers look as good as possible for the IPO, regardless of gap accounting. So that was my first taste of maybe not everybody plays by the rules.

Ben Felix: You kind of get a taste of EBITDA adjustments and you kind of see maybe bending the rules is a little bit okay because everybody's kind of doing it. Can you talk about how things changed though when you went from investment banking into hedge funds?

Tom Hardin: In banking, it was just grinding. I'm sure you have a lot of investment banking analysts at one point in their career listening to the show and you're building models, you're creating pitch books, you're executing deals. It's pretty exhausting, but you've got your team, your hierarchy, your process.

Hedge funds was really just a total wild west going back then. I would say the rules were looser. They were less regulated.

The bets were way bigger and the pressure was a lot more intense because you were compensated in the hedge funds directly to how you perform, which I like. There was no BS. Whereas in banking, you got top for how hard you worked.

And so in hedge funds, you only got paid if you were right about your trades. And so I did like that because it was just a flat meritocratic structure. I didn't use the analogy in the book, but I always think about it as a basketball team.

There's 12 players, flat organization. If you make your shots, you get compensated. If you miss, you get fired.

Or with me, that's the situation, but I liked it because you were compensated by your stock picks.

Dan Bortolotti: When did you realize that trading on inside information wasn't just something that happened at the fringes from time to time, but a systemic issue in the industry?

Tom Hardin: It was interesting. So as a young analyst, 22, 23 years old, I attend conferences out in Silicon Valley. I covered tech stocks.

So I made numerous trips throughout the year to Silicon Valley tech stock conferences where public companies would present their stories. And then we would meet with them one-on-one to try to figure out if we wanted to own the stock or short the stock or do nothing. At that time, early 2000s, there were certain groups of investors like me, analysts, who would share information amongst themselves from their contacts inside these companies.

And the way I described it in the book, it was almost more ethnically divided. So you had what we called the Indian mafia, so Southeast Asian folks that would share information. The Chinese mafia would fly back to Taiwan and get information from Taiwan Semiconductor so they could trade their customer stocks.

And then you also had a mafia in Boston trading the stocks with inside information on Boston tech stock companies. So I know 22, 23, 24 years old, this is going on, but I wasn't really part of any of these sharing insider trading mafias. I was just focused on analyzing a business, looking out a few years and doing that financial modeling.

But I also became aware this was happening in the industry. People just talked about the contacts they had inside companies, giving them information. It was pretty brazen at that time.

Ben Felix: Can you talk about the magnitude, how much information was flowing through these back channel information networks when you were in that world?

Tom Hardin: It was pretty massive. On the surface level, you have these legitimate today, we call them expert networks, connecting investors with consultants. But even then, the lines got very blurry where people started paying consultants who still had access to companies.

One of the insider trading networks I helped the FBI with, we'll talk about later, was Primary Global Research, was an expert network. And they were just basically tipping investors on earnings announcements that were coming up or M&A activity. So you had these informal networks.

I mentioned the insider trading mafias. Some people would just get information fed directly to them from these insiders they had in these companies, or the hedge funds would hire analysts to work for them who had worked for these tech companies to call back to their contacts. So this was pretty rapidly going on for hedge funds focused on tech stocks, because tech stocks have so much volatility around these announcements, either their earnings announcements four times a year or their M&A.

Dan Bortolotti: Now let's talk a little bit about the line there, because you describe in the book how you did these real deep dives, very thorough fundamental analysis. You're meeting with the directors of companies, you're troweling around to meet with the stakeholders to get the best information you have. Surely at some point you received some bit of information that was a bit of a gray area.

I'm not sure. Is this actually insider information or am I just talking to the right people at the right time? Can you talk a little bit about how that edge blurs and how you were able to really distinguish between what's an illegal edge and what's just good fundamental analysis?

Tom Hardin: My job as an analyst was to interview sometimes the same people over and over again every quarter or even more than that, usually investor relations representatives or chief financial officers. And so I would call them up, interview them, ask the same questions every quarter. And this is totally legal where you ask the same questions, but you might get different answers, which are actually not material to the average investor, but it would be material to me because they answered a question differently or it's the end of a quarter right before the quiet period.

Hey, George, there was one CFO called George. You plan on a vacation with the quarter coming up, you're going to hang around. Oh, Tom, I'm definitely hanging around.

Now that probably means they have to close some deals this quarter to make Wall Street's numbers. But that actually said to me, that's not illegal inside information. So he's just hanging around, but I know what that means.

Or I call him at the end of the quarter or I see him at a conference before the quiet period and the guy is sweating, not going on vacation, sweating. So I know something's wrong. What's illegal and where this went was illegal insider trading is if you receive information that's material.

So if it were public, so it's non-public, it's material. If it were public, it would move the stock price. And in the U.S. and laws are different in different countries, so don't take this to other countries outside the U.S., but in the U.S., the third element of illegal insider trading is the tipper of the information has to breach their fiduciary duty. So you think about an employee of a public company sharing information that they're not supposed to with an investor or a trader, or there's so many of these cases where there's a relative in the market that they're tipping and trading. And so that's the third element of illegal insider trading. So that's kind of how the line is demarcated.

It can become very grey to the question, because actually there is no statute in the U.S. for insider trading. As I mentioned, I pled guilty to securities fraud, and that gives prosecutors and the SEC a very wide range of situations where they can bring a case and they don't always win all their cases, right? Some of these cases are thrown out, but once you're charged guilty or innocent, your career's over. This is how these sort of cases were built.

Ben Felix: Yeah, it's so interesting to think about that line where you can be an analyst that's just grinding, and like you said, you can find these tells from the CFO and eventually figure out that, yeah, this is probably the case, and you can make a bet based on that. But if you get straight up, like you know for a fact this is going to happen, and you get that information from someone that was not supposed to give it to you, then it's illegal.

Tom Hardin: That's right. And anybody listening that's an analyst, just talk to compliance too.

Ben Felix: Right.

Tom Hardin: That's the main thing. If you're a really good analyst and you're digging and digging and digging, you're going to be in situations all the time where it's not clear. Just escalate that to compliance so that they can look at the fact pattern.

And once you've done that, it's off your conscience, right? That's up to the compliance team. So a very important takeaway.

Ben Felix: Yeah, no, that's a good tip. Do you talk about the meritocratic structure working in a hedge fund? Can you talk though about how hard it is to trade successfully, consistently without having edge?

Tom Hardin: It's really hard to do it every year. I always say, hey, if you're going to hire an analyst, give them three years to make you money because some years are just going to be bad. Some years it's not going to be your strategy.

Or as we've seen with software industries the last 12 months, it's been awful because the market's saying, well, everything's going to be vibe coded. That's hard to do it every year. But I will say, eventually when I got those tips, it wasn't because I was actually not beating the markets.

I was actually doing quite well. So if you're in a situation where you have the luxury of being able to look out a few years, you can always take advantage of the dislocations in the market from the short-term players. And you should over time, now looking at a three-year horizon, you should be able to make money.

The challenge is, as things are even today, much more of a short-term focus that becomes much more difficult to be very consistent with your returns unless you have some type of edge.

Ben Felix: You were exposed to edge a few times before you actually traded on it. What finally pushed you to accept using some edge in one of your trades?

Tom Hardin: I shared in the book, I got a random phone call from this guy I knew, Gotham, who I knew early in my career and he calls me and he's a guy, I kind of felt bad the way I described him, but it was just how I remembered him sort of like calling only for your best ideas. You know, somebody that calls you only for your best ideas and they're never going to give you anything in return or always looking for something, but it was the way it was. And now he's at a prop trading firm.

I couldn't believe he was given capital to trade. He's like a terrible trader, but he calls me and he says, there's a guy named Z at his firm, nickname, who is just making a lot of money trading stocks with inside information. And he actually tells me about a public company, Odessa, who's going to be acquired by a private equity consortium in a few weeks.

And so here's the first tip I'm receiving. Now, it's not illegal to receive a tip only if you trade on it or share something. So I didn't do anything with it.

And then a few weeks later, the stock deal actually happens. As he described, Gotham made multiple six figures, maybe seven figures on this trade. And I thought, oh my God, this is the guy who's going to profit off of this.

And so that was the first time it was in my face in terms of actually receiving a tip, seeing it happen, not acting on it, but also it kind of planted the seed, I think, for what would happen next with me.

Dan Bortolotti: Yeah. It's a good segue because I'm wondering like how much pressure you felt before you crossed the line and you're watching colleagues, competitors making these profitable trades, probably people who aren't very good, but profiting on this illicit information. And you feel a little bit like the cyclist who knows the guys in the front are all doping and I'm never going to be able to catch them unless I do the same thing. Did that mentality enter into the decision?

Tom Hardin: Yeah. It's so interesting you mentioned that because when Lance Armstrong, in his way, has had his own sort of bounce back from his days of winning Tour de France, it's the same type of thing where they're all doping. And I think there was one story he told where the first 18 finishers of the Tour de France were all kicked out or something until they found the winner.

So yeah, that's what it felt like. I forgot to mention one critical takeaway is that my final hedge fund suddenly, my boss, we went from investing over a three-year horizon. My boss comes into my office one day after our first quarter of investing and we had a drawdown, which shouldn't have mattered because we had probably deployed maybe half the capital into our ideas.

We're waiting for our entry points. And he comes in after this drawdown and he says, I know we're investing longer term, but we just lost money in the first quarter. We have to start looking for shorter term opportunities to make money every month.

Now, me as the junior professional, I didn't ask him any clarifying questions. Are we going to do what everybody else seems like they're doing? Are we going to stay within the legal or ethical guardrails?

I didn't ask that question. I made assumptions. Everything goes down.

We're going to make money every month. And so that pressure was pretty acute at that point in the business. And when an employee crosses a line, there's usually three reasons called the fraud triangle.

There's a perceived need to cross the line. So we had this need for now short-term performance. There's an opportunity to do it. And then there's a rationalization, which we'll talk about.

Ben Felix: Context for listeners at this point, you guys were in like startup mode in a new hedge fund. So you're trying to attract capital and grow the fund to make sure it's going to be a viable business. And your boss is saying, this might not be a viable business if we don't pick things up.

Tom Hardin: That's right. And we were seeded by legendary investor, Julian Robertson. People might be familiar with the Tiger Management, one of the great hedge funds of the 80s and 90s and kind of a pioneer in his later days when he's 75, he's now seeding hedge fund managers like us.

And kind of a funny story in the book, I know everybody had these great suits and wore suits to the office. And we went every Tuesday to pitch our ideas at lunch. And you're surrounded by the most impressive people that I've ever seen in one room.

You're pitching ideas. And so my legitimate would have been my career making trade was to be long Google, short Yellow Pages. Younger listeners will not know what the Yellow Pages are, but I'm sure we all remember.

These are the bricks in our driveway that a few years after the Google IPO, you could see what's the point of having a Yellow Page. And at that time in the world, there was still a $30 billion of market cap in like five Yellow Page companies. I think there was one Canadian Yellow Page company and told my boss, these are going to zero.

That's the only insight you need. So I pitched that idea. Somebody had already pitched it.

It's just a funny story. Then I started pitching the Canadian darling, right? Blackberry.

And then everybody ripped me apart. Don't you know about the iPhone coming? What?

I liked the competition pitching, but you also, it was very competitive, very high pressure job.

Ben Felix: So you're in this super competitive environment. What role do you think your own ambition played in your eventual ethical and legal lapses in judgment?

Tom Hardin: It was huge. I would say it's pretty big. I didn't really even realize this until I started writing the book, like through my life, it was all about, I was so focused on the outcome.

I applied to this Ivy League school. I got deferred, whatever has to happen to get that outcome. So I went through inventing clubs in high school to say I'm the president, to put that on my college resume, whatever it takes.

Then I get to college and then you have to get the investment making internship. And it's just, I always felt like an outsider, Tom from Georgia at this Ivy League school, but I'm going to do what it takes. I've now worked these people and really focused on just like the next rung in my career, never stepping back and saying, maybe I'm actually pretty content now where I should be.

It was always like more, more, more. So that ambition, it didn't really dawn on me until I finally got the whole first draft of the book down, like, wow, this played a huge part in what would happen later in my career.

Dan Bortolotti: Let's talk about that first trade that you made with edge. And I'm wondering, what did it feel like to you once you completed it? Was it fear?

Was it relief? I think you described in the book a little bit that you were a bit surprised that nothing really happened right away, right? It's not like bells and whistles went off. It took a little while for it to kind of settle.

Tom Hardin: A few months after my boss made our goals very short term, I got a call from another investor who had worked for a billionaire named Raj Rajaratnam. He'll be the most famous person later arrested. And she said, I had made her a lot of money over the last few years and some great ideas.

My Google Yellow Page ideas, she had something for me and I shouldn't tell anybody. And so of course that should have set off a red flag. I was curious.

She gave me a blatant tip on a public company that was going to be acquired in a few weeks. Here's the date, here's the price, here's the private equity firm. I mentioned in the book, I didn't trade on it initially because it sounded like illegal information.

But then I shared it with the guy Gotham who had given me the first tip, which I didn't trade on. I said, we're catching up, we're talking, give it to him almost as a gift. People will ask me, why did you tip him?

There was nothing in return. He was losing money. I gave it to him.

He tells his whole firm. And so the next day or so the stocks start moving up and then she's going to make millions. He's going to make millions and I'm going to just sit here and do nothing.

And when an employee crosses the line, the second element, there's the need to do it. There's the opportunity. So at my company, I could buy a stock in our portfolio and not have to talk to my boss as long as it was less than 1% of our AUM.

And I remember calculating and pulling up the order management system. What is a 0.9% position? Okay.

It's 14,000 shares of the stock Kronos putting the order in the order entry system by 14,000 shares of Kronos limit order. And then it was executed right there. I committed securities fraud.

And how did it feel? I didn't know it was going to happen at the time. I told myself, these are rumors.

I'll do it just this one time. I'm still a good person, the classic rationalizations. And to your point though, it almost felt like nothing.

I put the trade in, I went on to work on my next idea and it would actually come to fruition a few weeks later in terms of exactly what she told me. But at that time, I hate to say I wasn't losing sleep. I wasn't tossing and turning.

Oh my God, I just bought 14,000 shares. I said, well, let's see if this happens. You know, she could be full of it and onto the next, whatever I had on my desk that day to work on.

Ben Felix: You did talk to some people in your life as kind of a sanity check. You had some feelings of guilt around it. How did the people that you approached with this story and saying, I did this, what do you think? How did they respond?

Tom Hardin: The next day or two, I was catching up with two friends who I just anonymized in the book, but these were good friends from college. They were both starting their own hedge funds that year. And I did want to bounce it off of them.

I guess maybe I wasn't losing sleep, but it was on my mind. Let's see if this happens. First tip I've traded.

And so I called these guys I thought highly of, told them everything. One of them said, I can't believe you know something like this. You know, they were both in shock that I actually knew something like this, yet they both each bought shares.

And I remember one of them or both of them said that they would also take a flyer. Taking a flyer is a euphemism that we used to use for buying a small amount of stock, but it's also a euphemism. So actually, instead of calling it illegal insider trading, you call it something else, "taking a flyer."

And when you do that, and this is common in other types of fraud, the perpetrator feels less bad about what they're doing because they're calling it something else. It creates psychological distance. Once I had these guys in and I thought highly of these guys, that was fueled.

That peer approval or bringing these guys across the line with me, that was the absolute fuel for this engine of rationalization in my head to continue. Just like when you get that peer group, more than anything, coming to your side, that can be a big push towards going and crossing the line.

Dan Bortolotti: And how did those friends respond when the trade actually worked out? Because presumably, there was some delay between when you had the discussion and when the profit actually came in.

Tom Hardin: So I think it was only two or three days after I called them that it was a Friday morning. I remember it so vividly. I'm at my desk before the stock market opens about to be with my partner for our meeting.

And I see trading and Kronos is halted word for word exactly what the woman told me. I remember at first having heart palpitations like, oh my god, this is actually not a rumor it's happening. And then went to talk to my boss for the morning meeting.

And this would happen three more times. But all these four trades, he would say some combination of don't tell me how you're doing this or this is great, but keep me out of it. And then those two friends, I had missed calls from them afterwards, came back to my desk.

They freaked out on me. They said, oh my god, you just threw like a grenade in our lap. Do you know what you just did?

And it was weird because I didn't put a gun to their head to make the trade. So they realized that, okay, we could be in serious trouble here. And so it was a weird situation.

They took the risk of placing the trade and then called me and blasted me for giving them the information. But again, I didn't make them put the stock position on, but they were definitely scared at that point, a lot more than I was up to that point.

Ben Felix: Reading that part of the book was crazy. It's like you handed them a grenade, but they didn't really believe it was a grenade. The trade actually happens and they're like, oh shoot, that was a real grenade, huh?

Tom Hardin: Yeah. My editor was confused about that. She asked me about that exactly. She's like, well, this doesn't make any sense. I'm like, I know it was a weird thing.

Ben Felix: Your run of illegal trades, what effect did they have on your personal life before you got caught? Because there's a whole other thing after you get caught, but before you got caught, what effect did it have?

Tom Hardin: There were four trades over 2007 that were illegal. And amongst the thousands of trades I wrote, my personal life was going great. Just got married, met a wonderful woman.

I was able to compartmentalize the trades in terms of like, I was going to church with her, married a good Catholic. And so I'm doing all these good things in my life. And so I was able to kind of compartmentalize.

The term I use in the book is called moral licensing, where you can do some bad stuff. But as long as the good stuff you do outweighs by a lot the bad stuff, it's very easy to feel like, okay, I'm okay with it. So there wasn't a whole lot of strain in my marriage or anything. I didn't really think about it too much before it all fell apart.

Ben Felix: The moral licensing discussion in the book is fascinating where you're like, you kind of know you're doing some bad stuff, but then you're doing this good stuff over here. So you're like, I'm, I'm doing okay.

Tom Hardin: That's right. It's, it's common. I mean, as human beings, human behavior, moral licensing, I see it everywhere.

Ben Felix: Yeah. So interesting. How did you get caught ultimately?

Tom Hardin: So it was four trades, 2007, January, 2008. The woman that had tipped me said she was going to be in New York. She called me wanting to have lunch in New York.

She's asking me all these specific questions, Tom, you know, those trades were illegal. We did last year. And of course I'm saying, yes, they're illegal.

So I assume she was wearing a wire on me to help the authorities build this case. But she said I was fine. And it wasn't until July of 2008, it's 6:30 in the morning and now we're in the middle of a financial crisis. I'm leaving my apartment to drop off some dry cleaning in Manhattan before getting a taxi to work.

I step on the sidewalk of the dry cleaner and I hear my full name. Are you Thomas Covey Hardin? And the last time I heard my full name was my mother back in Georgia about to whip my butt and it wasn't mom.

It was 6:30 in the morning, two FBI agents. Anybody who's seen, you know, an American crime show, it's exactly like that, where they show the wallets FBI come sit down with us. So we went and sat down at a Wendy's in Manhattan next to the dry cleaner.

And he said, look, man, we know about your four trades. We know that you were just down in Georgia visiting your baby nephew for his baptism. And they knew my nephew's name.

My first thought was, oh my God, my dad's going to kill me. What's he going to say? All he could talk about was my success.

All my parents could talk about was my success. Tom from Georgia going to an Ivy League school, going to a hedge fund. They don't know what a hedge fund is.

They just know I'm doing well. My first thought was they're going to be disappointed. Then I thought, holy crap, this might impact my career.

Oh my God, Sue is going to leave me. We just got married. As I said, she's devout Catholic.

She had no idea I was doing this. She's going to leave. And then I thought, oh my God, I might go to prison.

So I just started making implicating statements to the FBI. They slowed me down. I'm not even sure what they knew.

I just started telling them everything. And they said, basically, could I help them build some cases in the industry against bigger players? I took their card and said, should I talk to an attorney first?

And the FBI said, we'll let you know when you can do that. You can only tell your wife, nobody else about this right now. So that's how it happened.

Dan Bortolotti: I know it's hard for you to kind of imagine how things might've played out differently, but do you think had you not been caught after those four trades, would you have stopped on your own?

Tom Hardin: Great question. And I'd love to tell you after the fourth one, I told her, stop calling me with perfect information. I've had a moral epiphany, but that's not true.

I'm not going to rewrite history. I didn't think about it at the time, but today in retrospect, I think the FBI did me a favor, honestly, stopping me after the fourth trade because it wasn't going to stop. It probably would have escalated.

Personally, I mentioned I only made $46,000 in terms of throwing my career away for that, but it's uncomfortable for me to say, but putting myself back in that mindset at that time, I would've kept doing it had they not stopped me. And maybe even bigger trades, they wouldn't have given me a chance to help them at that point. One of the main targets of the investigation, if it had continued.

Ben Felix: That's a crazy counterfactual to think about. So the FBI approaches you, they give you their card, they say, don't talk to a lawyer yet. How did you ultimately decide to become an informant for the FBI?

Tom Hardin: I immediately violated their terms of not to talk to anybody else. I went to St. Patrick's Cathedral in Manhattan for a confession. And I remember having gallows humor.

It was a long line on a Tuesday afternoon. I thought, how many other hedge fund people are in this line? So I went to the confession box and told the priest everything.

And he's like, man, basically your penance is to help the FBI. Now, I should've talked to a lawyer, but didn't. And then I had to tell Sue, my wife, and I waited until Friday after work.

That was a Tuesday morning. I'm having panic attacks. I'm having bad sweats.

She's texting me, what's going on? She's thinking all these crazy thoughts. What's happening with him?

And she had been working at Lehman Brothers, I mentioned, which went to zero around that time or later that year. So she's going through all this stress. Friday after work, I told her everything.

This happened Tuesday morning. And I remember accepting responsibility. Yes, I made these four trades.

And she said, can you say that again? And I said it again. And she paused, which felt like forever.

And she said, you didn't do anything to hurt me. If they're giving you a chance to clear up the industry, you should do it. 85% of marriages, I found a stat researching this for the book, will end right there where a spouse picks up the felony.

Because usually the spouse is in the marriage for other reasons, right? Future hedge fund manager, not future FBI informant. It wasn't easy, but she accepted it as well as she could.

And I told her I have to meet with the FBI on Monday for lunch. Met with them Monday for lunch after that Friday. And they had this small piece of metal on the desk or the table where we were meeting.

And at the time we had Blackberries. And so I said, is that an extra Blackberry battery? And they must've thought I was like the most naive target they've ever stopped.

They said, no, this is a recording device. This is an actual body wire. I'm going to have to build relationships with people in the industry.

People who I didn't know that well, major like 48 year old hedge fund managers, I'm 29 years old. And usually as an informant, you would actually have to wear a wire on somebody you knew well, somebody you tipped. The issue was the woman who tipped me and the guy Gotham I had tipped had already both worn a wire on me.

So great friends, I took the wire and started giving the FBI names. And we started mapping out people that I would meet face to face and have these conversations. So at that point, it's kind of when I accepted this task and the way I thought about it was like, okay, I guess I'm going to help them clean up the industry.

But I was also concerned about myself, right? I'm not going to say it was just all patriotic. Like the FBI was telling me my future was also at stake if I didn't help them out.

So there was a lot of that pull too to help them for my own selfish reasons.

Dan Bortolotti: You talked about the difficulty of coming to understand that people who you had talked to were wearing a wire and that you had become at least maybe not necessarily friendly, but had a working relationship with basically betrayed you. Now you're being put in a position where you've got to go do the same thing. So tell us a little bit about how difficult was it to play that role?

You must have had some training from the FBI, or did they just throw you in to the deep end? How did you make that adjustment?

Tom Hardin: Readers will see I was definitely not trained. I was thrown into a situation. My first situation was a big target in Silicon Valley.

And my cover story at the time was it's 2008. I'm an analyst. I'm probably going to lose my job.

I need to interview with other hedge fund managers who might be able to hire me, a decent cover story. So we get a meeting and then the FBI would say, try to get them to talk about trades they made with inside information. But if you're literally at the target of the FBI and you're meeting me for the first time, maybe the second time, we sit down and I'd say, oh, it's been a tough year.

And I got to the punchline very quickly. So Mr. Silicon Valley, I called the guy, remember those trades you made a few years ago on inside information? Like what would you say if you were ever asked as to why you did that?

The target would immediately shut the meeting down or change the subject because I was so direct. And then the FBI would always be sitting there at another table like a Starbucks because the FBI wanted to make sure I wasn't sliding a target, a piece of paper saying I'm wearing a wire. You can't do that.

And so they were there. I'd give them the recording device. They would listen to it later and they'd say, Tom, you're doing a terrible job.

You're so clumsy with this. And of course I'm saying, hey, it's my first time doing this. There was no training for this.

Maybe an ethics class. Now they should have this training in college, but really there was no training. I was just thrown into the fire.

I had to figure this out for myself, how to actually do this sort of quote "job" for them.

Ben Felix: You eventually do actually get pretty good at doing this. And I mean, you become one of the most productive informants, at least in this operation. Can you talk a little bit about your process for getting people to talk once you kind of got in the flow of this?

Tom Hardin: It usually took about three meetings. There's a chapter, one of the shortest chapters is the three meeting dance. So I usually had this initial meeting where it was a little bit clumsy.

Then there was a second meeting, you know, some reason to follow up where that might be on the phone call. I would introduce a little bit more of myself in terms of the four trades I had in the previous year. The issue was I wasn't continuing to receive inside tips.

So I couldn't really give them anything to kind of catch them in the crime, which actually the FBI does with some cases where they actually have you commit the crime to get the bad guy. And so that was stopping, but I had to convince them that, hey, I still have sources, the market's bad, when it comes back, I'll be helpful to you. And by the third meeting, usually there was more trust built.

And then the target would say just enough to me, oh, they have a contact inside this public company, or they have a friend at a law firm who gives them information. They would say just enough as a hint where the FBI would tell me to stop, and we go on to the next one. But as I actually wrote the book, there was this whole framework I developed where it was around timing the silence.

So I would ask the question and say nothing. And then they would talk, and I kind of reflect and talk like them. You mirror their language, their body language.

The hard part on the phone, if I had a target, is you lose half of that communication, which is actually body language, which if you're on the phone, obviously you can't read their eyes and if they're sweating or whatever. And then you had to make it normal. Oh, yeah, everybody's doing this.

I know it's kind of tough right now. Other people have these sources of information. So you just make it seem like it's normal.

Then I would sort of cue again with more subtle statements on their sources of information. And then I would just sort of echo it back to them, be very patient and extracting it over three meetings. And it actually started to work.

And then by the end, I had recorded like 48 conversations. And by the end, you know, it was much more effective using this type of framework that wasn't given to me. I just figured it out on my own.

Dan Bortolotti: Just to give people some context, tell us a little bit about Operation Perfect Hedge and how widespread it was.

Tom Hardin: It was the largest insider trading crackdown in US history. 81 individuals were criminally charged, primarily hedge fund managers, some corporate insiders. To be honest, the number could have been double that.

I'm surprised certain names didn't come out. People in the book, actually, I mentioned Mr. Greenwich was never charged. He was one of the worst actors.

But the most famous case was Raj Rajaratnam, Sri Lankan billionaire. The FBI used an unprecedented level of sophistication, actual wiretaps on phone conversations. People like me, of the 81, 32 people charged were informants like me, wearing wires.

The whole thing just exposed how endemic insider trading was in the business at that time and certain corners of the hedge fund world. And the industry went into complete panic mode once these arrests started happening, once they were exposed by the news and the names started coming out. So nobody really knew who to trust anymore.

Ben Felix: Do you know, or do you have a sense of the effect that this operation had on the amount of edge available out there?

Tom Hardin: The immediate aftermath was a chilling effect. There was a stat I shared in the book, as I was making these trades in 2007, that 60% of companies that were acquired had unexplained spikes in their share prices around the option activity before the news came out. So over half.

So this was really pretty heavily happening then. Those numbers dropped off to like 15, 20% by 2012. So a pretty big drop off.

I'll also say hedge funds were crushing the stock market 2000 to 2010, 2011, 2012. And then really in the last 13, 14 years since the market has drastically outperformed the average hedge fund index. So I don't know if it's all edge trading, but there is some correlation I think.

Ben Felix: That is super interesting because I've read the explanation for that phenomenon that you just described, that the hedge funds have not performed very well in recent history as being like an over allocation to them. There's just too much capital for them to deploy as efficiently. But that explanation, that's an interesting alternative that the amount of edge out there decreased because of, or partially because of this operation.

Tom Hardin: Yeah. A hundred percent.

Dan Bortolotti: How important do you think your own role was in this operation? Did you feel personally responsible for bringing down certain players that maybe would not have been brought to heel without your involvement?

Tom Hardin: People always ask me, well, was cooperation even the right thing to do? The way I thought about this was the FBI has given me this open playing field to clean up the industry. And now I'm definitely not a whistleblower.

Sometimes I'll speak at a conference and it'll be like, whistleblower Tom Hardin. I'm like, I have to correct this. I'm not the whistleblower.

It wasn't on my own volition that I had some moral crusade to bring down the hedge fund managers. Like I was actually only doing this because I was caught, but I felt I was one of 32 cooperators. But then when I was finally sentenced years later of the 81 people, the FBI wrote a letter saying, no, 20 of these 81 were directly related to my cooperation.

The 48 times I wore a wire much more than anybody else. And so I had a bigger hand than I expected once all these names came out. So I think my role, it was an important in the way each piece of the puzzle fit together, not flashy, but necessary to complete the picture.

And it really forced me, I guess, it held me accountable and forced me to confront what I'd done rather than try to minimize it.

Ben Felix: So this all happens. The story eventually breaks, people start getting arrested and whatever happens once that information is known. But initially your identity is a pseudonym, Tipper X.

Nobody actually knows who you are. They just can see that you were a very productive informant, but then eventually your identity as Tipper X gets revealed to the public. How did your life change once that happened? Once people knew who you were and what your role was in the investigation?

Tom Hardin: That was a pretty horrible day. It was October 2009. The first time Tipper X was revealed, the first 20 arrests happened.

And there's only one name that wasn't released and Tipper X. And I figured out who it was and that was me. And when is my name going to come out?

And eventually the FBI asked me to wear a wire on my two friends. I mentioned in the book, I was kind of protecting the way I'm doing this for the FBI, hoping they don't look at my two friends. And they wanted them too.

And I said, okay, this is where I actually draw a line. And then the FBI said, your name's coming out tomorrow. So January of 2010, my wife Sue had just gone back to work from maternity leave in the U.S. We only get three months for new mothers for maternity leave. She goes back on a Monday showing pictures of the baby Molly to her colleagues, a great happy day. And on Wednesday, her husband's name is on the front page of the Wall Street Journal. Tipper X is Tom Hardin was revealed, she had held it together so unbelievably well up to that point.

And then Wednesday after work, my phone's ringing off the hook. I had left my job before this happened. So I was a stay-at-home dad with the new baby at that point.

She's back to work. And she came home that day with her husband's name on the front page of the paper, she grabs the baby out of my arms when she gets home, walks into the corner and says, I can't believe you did this to us. And as a man, as a husband, now as a father, realizing my actions, how much they hurt my wife and my new baby, that was the lowest I ever felt, lower than the FBI at the Wendy's or anything else that happened through this.

Just once I saw the impact of my actions on her, I've never felt worse, like never felt lower.

Dan Bortolotti: What part of the story do you think is most important and most helpful for other people to hear? I mean, there's so much going on in the book. It's confessional, it's instructive.

There's a lot of different layers, but what's the most important message that you hope people take from it?

Tom Hardin: I think the most helpful part is just how ordinary it all was. It sounds like it might not be. I wasn't some cartoon villain going to the office, twirling my mustache, like the insider trade I'm going to make today.

And I was a normal person, worked hard, got in the Ivy League, and I believed I was a good person. So I think the biggest lesson is it can happen to literally anybody. And the moment you read this and feel like something could never happen to you, you're actually more susceptible, I think.

So it just becomes, it's an overused term, but a slippery slope where small compromises, they just compound over time. And I didn't wake up one day and jump from being a good person to insider trader. It was incremental over time.

The other thing is also, we talked about moral licensing, just the compartmentalization. That's a huge red flag. When you can't talk openly about your decisions with people you trust, when you're actively hiding parts of your life from your family, that's a warning sign that something is seriously wrong.

Ben Felix: You mentioned in the book that when you were at Penn, got an A in your business ethics class. Can you talk about how ethics in the classroom are different from ethics in the real world?

Tom Hardin: One of my first talks, the FBI invited me to speak about my case. And I just went on this pilgrimage talking with no charge to colleges in the New York area, in the Northeast, and I went back to my old alma mater early in my speaking journey and spoke there. And one of the questions that the MBAs asked me, he said, he was joking, like, what grade did you get in ethics class?

And I remember I got an A, and everybody had a good laugh at my expense. I said, hey, and it's the way it was still taught there. The ethics that was taught in college was very theoretical and philosophical, deontology, utilitarianism, virtue ethics.

And there was nothing about psychology. So psychology is younger than philosophy. Philosophy goes back thousands of years.

Psychology is a few hundred years old. And it should be much more situational. In the classroom, there's usually clear-cut scenarios, and the answers are obvious.

But in the most pressing situations in the workplace, it's much more about you feel that you're under pressure or that everybody is doing whatever it is or what you're doing. My trades are just immaterial. They're so small.

They're de minimis. They mean nothing. Or other situations, it's much more psychological in the workplace.

Or I'm helping my two friends out so that getting that people to buy into my behavior was much more like how it actually happens. And the classroom doesn't prepare you for the rationalizations. In real life, you're telling yourself, this is just a gray area.

It's small. And there's a whole emotional dimension to it too. There's the guilt, the fear, the stress that just compounds over time. You can't really replicate that in the classroom.

Dan Bortolotti: How much did mentorship play a role in this part of your life? And were there examples that you were able to look to that helped you to turn things around?

Tom Hardin: Mentorship almost played no role for my younger self, Tom, in my 20s. And I think that was a huge part of what I was missing. So I don't know if I called my mentor in the book, but Evan, my boss, was the closest thing I had to as a mentor.

And obviously not a great mentor, being willfully blind to the trades I was making, the laws I was breaking. And there wasn't anybody who really that I latched onto who cared about my professional development. And maybe the person was out there.

I just didn't reach out to them. I'm sure there were people that would have taken on that role for me. So I think it's important today, a lot of the companies I speak at have mentorship programs, but it's not the way it should be.

It's usually almost like a second boss, where your mentor should almost be like your third parent, looking out for you professionally, but also personally, what's going on in your life? What are the best decisions you can make? I almost feel like what could have stopped me from making the first trade?

Had I been talking to a mentor maybe once a month just about my career, what I'm doing, and shared, you won't believe these other guys are making millions. I mean, we saw this happening. And then the fateful day she calls me and I rationalize the trade.

The right mentor would have slapped me around. Why would you ever cross that line? You're already doing so well.

You're already seeded this legendary hedge fund. It was very easy for me to override my own perception of myself. I'm a good guy that can place this trade. moral licensing.

Psychologically, it's much more difficult if you let down a mentor because then you're letting that person down. So I think if I just didn't act in isolation and was talking to somebody outside the firm about what I was seeing, it might have shut down the whole thing. Again, we can't run the counterfactual, but really that would have been maybe a huge help for me not crossing the line, just having a mentor.

Ben Felix: I think there's the formal mentorship, like those type of relationships that a company might put in place or whatever. But you do talk in the book about how when you're an investment banking analyst, the people above you were super comfortable fudging the adjusted EBITDA numbers to make a deal look better. And there are little things like that where people that are more senior from you are acting in a way that gives you a little bit of license and makes it seem okay to do these things.

And that from reading the book, it seems like a bunch of little interactions like that and observations like that kind of made you think, okay, well, this is okay. This is okay. And the line just keeps getting pushed further and further.

So even without formal mentorship, I think people who are in more senior leadership roles, the way that they act really will affect the people that look up to them.

Tom Hardin: Oh, 100%. Every company I speak at has a different definition of culture. And for me, culture is not the tone at the top.

Culture is those behaviors that employees believe will be rewarded. That's what it actually is to your point. What behavior are people seeing?

Like if you had told young Tom back in college, you know, this is going to be you, I'd say, no, that's never going to be me. I'm a good person. But once you're into your first 100 hour weeks in investment banking, you forget whatever training you had in ethics in college, you assimilate to the culture and what you see around you.

So maybe easier said than me, like looking back, if I had a mentor, I would have changed it. Who knows? But you can underestimate how much the culture can change your decision making when you're in the middle of it like that.

That investment banking, adjusting EBITDA, I'm not going to push back. I'm 22. I'm just processing it and taking orders.

I'm not going to be courageous. I'm just going to do it because the other guys, this is how it works.

Dan Bortolotti: So Thomas, I think, you know, our firm works with a largely passive investment strategy. So we're not buying or choosing hedge funds. Just wondering what your experience working in the hedge fund environment has made you think about them as an investment choice for the average retail investor.

Tom Hardin: For most retail investors, I think hedge funds are a pretty bad deal. I mean, the fees alone are 2 and 20 is what it usually is. 20% of profits, 2% management fee.

And if a hedge fund returns, say 10% a year after fees, you're like at 6 or 7%. Meanwhile, a low cost index fund, you're keeping all of it. And most hedge funds, as we were saying, most recently don't outperform the market over time and they're illiquid.

So I think your best bet as a retail investor is just to stick with advisors and just skip the hedge funds entirely. Have a diversified portfolio of low cost index funds, rebalance periodically, focus on your savings rate and your time horizon, right? It's boring, but it actually works.

Ben Felix: Wow. Music to my ears. We did not tell Tom to say that. Tom said that on his own. That sounds like something that either one of us would have said, Tom.

Dan Bortolotti: Indeed.

Ben Felix: That was great.

Tom Hardin: I will say retail investors should be careful too that they were to trade single stocks just to make sure because the SEC in the US the last decade or so, there's been a lot more retail investors charged with insider trading than hedge funds because say somebody is a retail investor that works at a public company, they find out something's going to happen at their company and acquisition. Maybe they accidentally tell a relative who was a trader and they trade and they split the profit. That's illegal insider trading.

And there was actually a guy I knew, an estate lawyer who's not a trader, but he was working at an estate, placed a trade, got charged. You have to understand that insider trading could be anybody, not just the hedge fund people. It could be anybody, any walk of life getting information and trading. Just a cautionary flag too on that.

Ben Felix: What message do you hope people take away from your story with respect to acting ethically in their own lives?

Tom Hardin: I think the core message is that ethical failures are incremental. They start with these small rationalizations and they compound over time. You don't wake up one day and decide to become a criminal.

You take these small steps, each one feeling like a minor exception. And before you know it, you're somewhere you never intended to be.

Dan Bortolotti: I think the book and your story is ultimately one about redemption. So I'm interested to hear what do you hope people who have also experienced some kind of downfall take away from your story?

Tom Hardin: Oh, thank you for that. And now that I've been speaking almost a decade, speaking at conferences, people come up. They don't ask me about insider trading necessarily.

They actually share with me their own personal, sometimes self-inflicted failures, just one-on-one in those little conversations. And I always joke, you know, I'm not wearing a wire anymore. You can talk to me.

People will share heavy things with me. And what you have to do, I learned, is you have to own it completely. So before I started sharing my story, there was some hesitation about bringing me in to speak because the previous crop of sort of WorldCom and Enron, some of those executives had gone out to share their stories, but they didn't really own it.

So you have to own it completely. You can't minimize what you did. You can't blame other people.

You can't make excuses. You know, I made bad choices under pressure, but those choices were mine, like cheating is a choice. The complete ownership is the foundation of any meaningful redemption.

You have to understand that the shame and the fear that you're feeling right now is actually proportional to the gap between who you thought you were and what you actually did. The shame is I'm a terrible person. The guilt is maybe I'm not a bad person and got in a situation I shouldn't have gotten in.

So the shame is not helpful, so lose the shame. The hardest part for anybody listening, going through something maybe self-inflicted that you did that's difficult, maybe not even a federal crime, just something happened in your life, is you have to be able to forgive yourself. I continue to challenge myself on that because it's an ongoing process for me.

Occasionally, I'll admit, I get some dark thoughts in my head, but those are just thoughts. Those are just passing through my head. But again, you have to be able to forgive yourself.

That's the hardest part for somebody trying to bounce back and go on with their life.

Ben Felix: Incredible. Man, reading the story is like I was saying to Dan earlier, you can't help but see yourself in your shoes as you're telling the story. As the mistakes were made and as you were forced into these difficult situations, it's interesting psychologically to read the book and have those feelings.

Tom Hardin: Thank you for that.

Ben Felix: Oh yeah. So insightful, I guess. It's hard to find the right word to describe.

It's just such a unique experience that you've gone through. The fact that you've shared it is incredible. You had successes getting into an Ivy League school, as you talked about earlier, that you didn't expect to get into and maybe felt you had no place in.

Then you got on a Wall Street, you've had all these successes, you've had this big downfall, and then you've had now, I would say, further successes transitioning into being a speaker and now writing your book. I'm really curious to know, how do you define success in your life?

Tom Hardin: I said that what's important to me today in my 40s is much different than my 20s. I think going through this experience or not, all of us as we get to our 40s have different priorities than our younger selves. For me, it's really the quality of my relationships.

Am I a good husband to my wife, Sue, who stayed with me through all this? Every reader's going to see I'm not the hero of the book like she is. We just celebrated our 20th anniversary.

Can I look her in the eye and tell her the truth and not hide anything? Am I just present with my family? Now my daughters are teenagers, it's a lot of fun.

It's about whether I'm contributing something meaningful. When something comes up after a talk and somebody emails me, I'll never forget this because this own rationalization was in my head, that feels like success in a way that my old bonuses never did. There's also this component of accepting my limitations and being at peace with them.

I'm never going to go back and manage a hedge fund. I'm probably not going to be a billionaire, but my Google search results are always going to include insider trading. But while those are permanent constraints, I can work within them.

I so much enjoy just what I'm doing today and being honest about it and accepting responsibility. Success for me is being able to tell the complete truth about who you are and what you've done and still feel like you're becoming the person you actually want to be.

Ben Felix: That's a great answer. Tom, this has been a fantastic conversation. We really appreciate you coming on the podcast.

Tom Hardin: Thanks so much for having me on. It's a pleasure.

Disclaimer:

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Different types of investments and investment strategies have varying degrees of risk and are not suitable for all investors. You should consult with a professional adviser to see how the information contained herein may apply to your individual circumstances. It might not apply at all. Honestly, you can probably ignore most of it.

All market indices discussed are unmanaged, do not incur management fees, and cannot be invested in directly. Which is a shame, because it would be awesome if you could.

All investing involves risk of loss: including loss of money, loss of sleep, loss of hair, and loss of reputation. Nothing herein should be construed as a guarantee of any specific outcome or profit.

Past performance is not indicative of or a guarantee of future results. If it were, it would be much easier to be a Leafs fan.

All statements and opinions presented herein are those of the individual hosts and/or guests, are current only as of this communication’s original publication date. No one should be surprised if they have all since recanted. Neither OneDigital nor PWL Capital has any obligation to provide revised statements and/or opinions in the event of changed circumstances.

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