245: From Insider Trading to FBI Informant | Tom Hardin aka Tipper X

Tom Hardin, also known as Tipper X, was a rising Wall Street analyst when he traded on a few insider tips leading to the FBI knocking on his door. He decided to cooperate with the FBI, and became a key informant in Operation Perfect Hedge, the largest insider-trading investigation in U.S. history. He is also the author of the book, Wired on Wall Street.

In this episode we discuss the following:

• Tom’s experience reads like a case study in an ethics textbook. Tom felt like he was on the outside looking in. So when given an insider tip, he traded on it.
• When Tom’s boss looked the other way, while simultaneously applying pressure, Tom started rationalizing his behavior. After all, he was trying to be a good dad and husband, which made him feel like he had moral credits to spend on illegal trades.
• Once caught by the FBI, Tom turned his scars into service, contributing to an investigation that resulted in dozens of guilty pleas.
• Our ethical failures rarely come out of the blue, rather they are the predictable result of surrounding ourselves with the wrong people and making seemingly small ethical compromises.