Transcript of 675: Tom Hardin (Tipper X) - The Largest Insider Trading Case, How Ambiguous Leadership Destroys Culture, Resume vs. Eulogy Virtues, Bad Decisions vs. Mistakes, and Building Psychological Safety

Welcome to The Learning Leader Show. I am your host, Ryan Hawk. Thank you so much for being here. Go to learningleader. Com for show notes of this and all podcast episodes. Go to learningleader. Com. Now on to tonight's featured leader, Tom Harden, is a former hedge fund analyst who became FBI informant Tipper X, wearing a wire more than 40 times to help convict 81 people in Operation Perfect Edge, the largest insider trading case in United States history. He's the author of Wired on Wall Street, the Rise and Fall of Tipper X, one of the FBI's most prolific informants. It's crazy. During our conversation, we discuss how pressure can create blind spots and what we as leaders can do to help prevent our people from making poor decisions. Then you'll hear about how Tom's story taps into a deeper truth. That is, we are all more susceptible to moral drift than we'd like to admit. Then we talked about living for your eulogy virtues instead of your resume virtues and how to do that while still making a great living. Ladies and gentlemen, this one is different than most of the conversations I have on the Learning Leader Show.

I hope you enjoy it. I think you'll find it both entertaining and useful. Please enjoy my conversation with Tom Harden. This episode is brought to you by my friends at Insight Global. Insight Global is a staffing and professional services company dedicated to providing amazing people to their clients and taking great care of them. If you need to hire one person, hire a team of people, or transform your business through talent or technical services, Insight Global can get you the people you need and help you develop them to reach their full potential. Developing your people can be tough, but having productive employees can be magic. Visit insightglobal. Com/learningleader. That's insightglobal. Com/learningleader to learn more.

Operation Perfect Hedge was the largest insider trading investigation in history. Around the time of the financial crisis, so 2008 to 2010, 81 hedge fund professionals were charged on Wall Street with insider trading, buying or selling stocks on non-public information There was 32 cooperators who helped the FBI build these cases. And I always say today, you don't just volunteer to cooperate with the FBI. There's a reason you do that. And they approach me on the street, which we'll talk about, and convinced me to help them out. And They called me Tipper X because I was the key informant. I helped build 20 of those 81 cases going back around 15 years ago or so. So that's what that operation was.

Wild. Okay. How did we get to the point where you decided to help them and wear a wire? I guess 40 plus times. Is that right?

Right. Over 40 occasions. It was July of 2008. I'm leaving my apartment in Manhattan 6: 30 in the morning to drop off some dry cleaning. I'm working at a hedge fund as a hedge fund analyst in the middle of the financial crisis. I step on the sidewalk and this guy behind me says, Are you Thomas Covey Harden? And the last time I heard my full name was my mother back in Georgia about to whip my butt. It wasn't my mom. I turned around two FBI agents dark suits. Can you come sit down with us? So that's how it all started, just out of the movie scene.

Now, why were they calling you by all three names and wanting to talk to you?

I think that's probably just a tactic to intimidate targets. You're not expecting that in 6: 30 in the morning in Manhattan, seven million people on the street. So that was part of the tactics. And then they sat me down. They were aware of four trades that I placed on inside information while working at a hedge fund. And they said, Hey, we think you can help us build these cases we're looking at in the industry. And I said, Should I talk to a lawyer? And they said, Don't talk to a lawyer.

So four trades you made based on inside information. Take me inside those trades and how you got this information and then how you made these trades.

Yeah. So I guess even back up where I started in my career, my 20 years working in the hedge fund industry. I loved investing when I started, especially with tech stocks. You can always bet on the new interest, bet against the old business. And I also became aware that insider trading was rampantly happening, buying or selling stocks on inside information. And I never felt I had to cross that line until one day. My boss made my goals very short term. So we went from investing over a three-year horizon to after we lost money, we have to make money every month. And so he walks into my office and says, Do whatever it takes. Ryan, as a junior employee, I didn't ask any clarifying questions. And here is a very ambiguous message from the leader to the junior to do what it takes. And again, me just letting the ambiguity sit. And then right after that meeting, a few months later, over the next seven months, I received four tips from another investor, placed very small trades in my portfolio at my company. I told myself, Everybody's doing it. The classic rationalizations that people can go through in your head.

It seems like I'll do it just this It wasn't one time, it happened four times. And then that was the end of 2007. Nine months later was an FBI approach on the street in New York City.

So you think from a leadership perspective, these guys, they were like, Dude, I don't really care what you do, but I do care about the results. So find a way, essentially. And if you have to go near or over the line, then you do what you got to do, Tom. Is that basically the mentality of all hedge funds at the time, your hedge fund? What do you think?

It was a lot of hedge funds focus on tech stocks because tech stocks trade in high volatility around their earnings reports, which are four times a year or M&A announcement. So it was really focused on hedge funds, looking at those companies. But to your point, ambiguity is something I see today. Sometimes I'm hired to speak to a Fortune 500 Leadership Summit. Say, ladies and gentlemen, it starts with an ambiguous message, which my boss gave to me. Then they pretend the message wasn't ambiguous. Don't question my communication. Just do as I said. And then that ambiguity, it becomes undiscussable because the employees are confused and don't question the boss. And then almost the undiscussability becomes undiscussable. And then you have this culture of silence. So it happened in a micro way at my little firm, but it happens in major ways in other types of industries around the world that I see quite often.

Have you watched a TV show, Billions, by chance? Yes. So Bobby Axelrod will say, How confident are you? And they'd say, I am not uncertain. I believe that's what Brian Koppelman, the writer of that show, has been on this podcast. I think that's how they phrase it, which essentially means I've got insider information. It wasn't like that.

So that's a really good show. They have great consultants. There was two people when the FBI approached me on the street that they were trying to get two big billionaires. One, they caught a guy named Raj Rogeratnam from Sri Lanka, went to prison for 11 years. And the other guy they didn't catch. And the show billions is based on that individual. And the way that they would get information was not directly. It was, tell me what your conviction is, 1-10. And when the analyst who's pitching the idea says 9 or 10, that implied that there was inside information. So again, to your point, not expressively saying, Here is the actual tip. But that's where it was The show, as I understand, it was derived from that case that never came to be.

Interesting. So I guess I want to look at this from a leadership perspective, Tom. And I guess, morals and ethics, and some people are willing to push it, some people go over the line. Now that you work and you speak with these big companies and you go to these leadership summits, what is your messaging around effective leadership, doing it with morals, with ethics, that perhaps you learn from your time of going over the line?

Leaders really need to identify that ambiguity I mentioned. One of the biggest takeaways is I look back to my situation and writing the book really had me focus on what was I actually thinking at the time. The book is much much longer than my keynote. And really, it's making decisions in isolation. So the information came to me. I didn't talk to my boss. I didn't even talk to my wife, who probably would have slapped me around. Why would you ever cross those lines? As a young man in my 20s, I just made decisions in isolation. And so leaders need to figure out where in your organizations, maybe there's one team, maybe there's one geography that's in a higher corruption risk country where people could be making decisions in isolation, especially today, Ryan, with everybody hybrid. Some people are in the office a day a week, some people So teams are all trying to figure out, my team's at home or in the office once a week, where do people make decisions in isolation? That's a big thing. And also what I try to do in my ethics training is to do muscle memory. Here's a situation, your boss is coming in, giving you an ambiguous disorder.

You have to have psychological safety at the company to say, Hey, I'm not sure here. I have to ask some clarifying questions. Psychological safety is a big buzzword now, but it's sometimes thrown around without any meaning behind it. You have to be comfortable as the junior to say, I'm just going to ask some clarifying questions here. Don't start making decisions in your own head. Get help that you need so you're protected. I mean, this is people's reputations, and as I understood, my livelihood was impacted.

One of the things One of the things that I, after reading and learning about your story, I wanted to talk to you about was this thought that most people, they may look at your story and say, I would never do that. Your story shows that we're more susceptible to moral drift than maybe we realized. And you write, typically 10% of employees are morally incorruptible. 10% are a compliance nightmare. And 80% can be swayed either way. Eighty % seems really high to be swayed, again, over the line. Can you talk me more about this potential for drift and how more of us are susceptible than maybe we'd like to think?

Yes, absolutely. There will be people that read the book and even hear my story today in the keynote. They're like, That would never be me. I would never make those decisions. I would argue you're more susceptible to falling down your own slippery slip when you think it couldn't be you. I always encourage people to have some healthy paranoia. Never say never. Ryan, if I had read my story back in ethics class in college that we all had, I'd say that that would never be me. I would never be 29 years old in making those trades because I'm a good person. We all think we're good people, but we all have the capacity to start rationalizing very small decisions. I think that 10,10,80 is really apropos the 10% are the nightmare of HR and compliance. Every time I speak at a company, they nod their head like, We know who they are. The 10% are the Girl Scouts and the Boy Scouts, but that middle 80% can really be swayed. So many companies I speak to today say, We have a great tone at the top. We have great shareholder letters. The tone means nothing. It's the What are the actual behaviors in the organization.

What is actually happening inside the company? What behaviors are rewarded? Company culture is not the tone at the top. It's the behaviors employees believe will be rewarded or put them ahead. That's exactly what the culture is. So the more granular people can get and companies and leaders can get with that, the more they'll understand it and create better cultures.

If you were giving advice, you're consulting, working alongside a senior leadership team, and you wanted them to build a place that's morally sound. They make the right decisions. They do it the right way. They do the right things the right way. And you just said that you got to ensure that the right behaviors are being rewarded. So what would you institute? Would there be some process or some reward system to ensure that they're living by the values and ethics that the leaders want?

Yeah, it doesn't even have to be anything that's really big and grandiose. It can be very small, just recognition of an employee who made an ethical call where they actually had to give up maybe some business because that was the right thing to do at the time. So not even a financial reward for that, just a recognition at the all-hands meeting or however companies have their group meetings on a Monday recap, we to recognize this person. Or maybe some companies have little newsletters that go out and say, Hey, this person shows ethics over the commercial opportunity because it wasn't the right one. So just little nudges like that actually will help set the culture. Also, I think it's more It's a lot of things to think about. Companies have to ask better questions. Every company I speak at always has a culture survey, and they say, Rate the culture of ethics and compliance, which is a terrible question because people always read it. It's more like, Which of our values are true, and which aren't, and in which way? And you have to ask questions that you maybe don't even want the answers to because it'll make you uncomfortable.

But you won't get it the root cause unless you're asking better questions is also something I've seen.

What are the right questions to be asking? What are great questions to be asking?

Every company has values, which of our values are true, which are not, and in what way? Just getting more granularity. You could just say, Well, looking at how we make decisions here, do we call our bad decisions, mistakes? That's the big one I wrote about in the book, because then we're not owning our bad decisions if we call them mistakes.

What do you want to call your bad decisions?

Bad decisions because they were actually made with intent, and mistakes are done without intent. And so I didn't learn that until I actually started sharing the story after all this happened. And I was telling myself I made mistakes. And then on the drive home, I was speaking at a college in Boston. I said, there's no way I made mistakes. I made bad decisions. Actually, my whole life up to that point of going through this, it made me feel better because I told myself I made mistakes. We make both, right? And just understand how you learn from them and the difference.

Can we take a quick side road on this? Bad decisions and mistakes. So you're a dad as well. I immediately start thinking of this as a dad. Okay. How do you talk about this with your kids when they make a decision and they say, I didn't mean to. I just made a mistake, dad. How does this go?

My oldest, I guess I'll tell the story. It's fine. She will listen. She was in kindergarten or first grade. The teacher called. She had written all over the wall with the crayon, just five years I made a mistake. Well, did the crayon fall out of your bag and hit the wall and it just did that itself? Or did you actually do it yourself? I did it myself. Okay, that's what we call a bad decision. Even at five years old, she understood that. Then going now that she's a teenager in 10th grade, there's all opportunities to make some very bad decisions which now could impact. Thank God, they didn't have the phones back in my day because that one picture could impact your whole life. I always sit down with them when we're having these discussions And they'll say, Dad, you and your psychology. No, this is actually my lived experience. Your dad went through this so you don't have to. And that's just something I see today to call them out and say, Those are mistakes, those are bad decisions. It's just important to think about the difference and did you have intent or not.

So that's how I do it today with their teenagers.

Let's go back to the day when you made the first insider trade. I just love to go inside your mindset as you're deciding to do it and then how you felt after the first one and after the second, and the third one, and the fourth one. Are you feeling shame or are you thinking like, Hey, I just got to do what I got to do? I'm just curious to get inside your head at that time.

So a few months after that meeting with my boss, do what it takes, be not asking clarifying questions. Now our goals are make money every month. I receive a phone call from a woman who used to work for this billionaire, I mentioned Raj Rajaratnam, who went to prison for some time. She says, Tom, you made me a lot of money over the last few years. I always gave her my best ideas. I wrote in the book, my best idea ever was long Google and then short the yellow pages. Younger listeners won't know what the yellow pages are, but they were back in the day, these big things in our driveway, and those were going to go away. And so that's the only insight you even need in this business like that. She calls me and says, I have something for you now, Tom, and you can't tell anybody. She proceeded to say, This public company was going to be acquired in a few weeks. Here's the date, here's the price, here's the private equity firm. When I talk to students today, I say, Imagine the answers to the test just fell in your Are you not going to look at them?

Are you going to throw it away? And I actually, I was still holding on to my moral compass. I was telling myself, I don't do this. I know a lot of people are doing this. But then I shared it with a friend I mentioned in the book who worked at a prop trading firm. He was down that month. We're talking. He said, Are you hearing anything out there? I can make a short term trade on. His wife was pregnant. They were expecting he was losing money. And so almost to help him out, I said, I don't trade this, but if you want to, you can do it. Just right there, it's really important for people to know. I've exposed myself to insider trading liability by sharing this information. So anybody working at a public company, you're not helping your friend, right? You're actually exposing yourself. He loads up. He calls me back. I see the stock moving up every day just a little bit. The woman that calls me is going to make millions. He's going to make millions. And I'm just watching it. He calls me back, Are you in? And when an employee crosses a line, there's something called a fraud triangle.

There's three reasons, usually. There's the perceived need to cross the line. So I had short term performance need. Then there's an opportunity. And the opportunity at my company was I could buy a stock in our portfolio less than one % of our assets and not have to talk to the boss. I remember calculating and buying a 0. 9 100% position in our portfolio. The third part of the fraud triangle is rationalization, which I said, Everybody's doing it. I'll do it just this one time. It's never once. Ryan, I could still think of myself as a good person. I'm a faithful husband, good amass. It's called more a license I've been seeing where 99% of my life I'm doing the right thing. I make thousands of trades a year. I can make one bad trade. That's how you can tell yourself, I'll do it just once and never again. It never is. And really, as I sat back, I said, I have no idea who she's talking to. She's full of rumors. And the big thing here, again, in writing the book, I realized my whole life, I would tell myself stories about crossing lines. Back when I got my driver's license, I'd go a little bit over the speed limit because my friend said it was fine.

When I was in college, I'm dating myself. There was Napster. That came out, did a little bit of that. So all my life, I'm telling myself stories. It's okay to cross that line. And by the time I was 29, I placed that trade. My boss actually said nothing. And so a week later, the deal happens. The stock is up 30 % before the market opens. We're going through our portfolio every morning, 20 stocks, and he says, Oh, it's one of those. Keep me out of it. So that's called willful blindness for leaders. Just to think about when you see short term performance in any business, you have to ask what's behind that performance? Just don't make assumptions. Anything goes or try to be willfully blind because then you're actually enabling that behavior, and then it would happen three more times. Just the same, it's exactly like that. Now, when the news came out, Ryan, I had my heart rate shot up. I thought, Holy crap, this is the exact information. Then when my boss said, Don't tell me about it, and I knew the other guys were doing it, I hate to say it, but I got an adrenaline rush.

Just, Oh, my gosh, now I'm part of this illicit in-group. And writing the book, I figured out I always felt like an outsider, and now I'm part of this end group who's engaging in this behavior. So that was really the mental gymnastics that were happening at that time.

It makes me hate your boss. I mean, this is the first thought of this. Oh, it's one of those. Don't tell me. I mean, I don't know. Maybe I'm just virtue signaling. I could be. I don't know. But what was he like as a boss?

Yeah, it was very confrontational. It was a 2007, 2008. So it was really a toxic environment, shouting matches, which is not uncommon in this business. It's high pressure. It's cut through. You have to make money for your investors. We were always blaming each other for the bad stocks because sometimes we would both work on a stock idea. That was your position. That was yours. At one point, he's in my face. Our secretary Terry. It was just very toxic. And by this point, he knew what I was doing. And over every trade of the four trades, it was some iteration of, don't tell me how you're getting this information. Keep me out of it. Oh, this is really helping us. And the fourth and final trade, I was at a conference in California. He mailed me, great trade. And he was actually never charged, but he actually knew what I was doing for certain. But that further fueled my rationalizations. He's 15 years older. He's my mentor, not a great mentor, but he thinks it's okay. And so I'm surprised I didn't start buying more stock, more than what I could do, because he's all into this.

We could have been making millions. And I just kept it small because I felt I'm just playing along. It's like dropping a penny in the Grand Canyon. Nobody would ever know until I found out that morning in New York City. People know.

Why wasn't he charged?

It's a good question. Today, just so people are aware, he would definitely be charged with failure to supervise his employee who's committing these trades. That's a civil case from the SEC. In these cases, the SEC, which has a lower burden of proof, and the FBI law enforcement has a higher burden of proof because you're actually potentially taking away people's liberties. And so today, the SEC would definitely charge somebody with failure to supervise because I was only once stuck analyst. How did he have that conversation? I'll never figure out how he wasn't charged.

Wow. Okay. So then they got you, and they're going to send you to jail or whatever. But there's another option. You could help us. You can work with us. Walk me through what's going through your head at that time, the conversations that you may or may not be having with your wife about all of this. I mean, this is what we see in movies, yet this is your actual real lived life.

Yeah. So at the Wendy's, we know about your four trades. Tom, we know that you were just down in Georgia visiting your baby nephew for his baptism, and they knew his name, and he's six weeks old. And so, Ryan, my first thought was, Oh, my God, my dad's going to kill me. What's he going to say? All our parents can talk about is our success. They don't know what Wall Street or hedge funds are. They just know that their son's doing really well. That was my first thought. They're going to be very sad about this. I thought, Oh, my goodness, my wife's going to leave. We just got married. I went through our CIA for her. She's about Catholic. She's going to have a reason to question the marriage. I thought, Oh, my gosh, this might impact my career. Oh, yes. Oh, my God, I might be going to prison. I start making implicating statements. Yes, I made those four trades. In fact, I mentioned in the book, two of them, there was a cash payoff situation. The FBI had no idea. The FBI said, Go on, go on. They said, I want to stop you right there.

Are you aware of this happening? You have the chance to help us. I said, Should I talk to a lawyer? They said, Don't talk to a lawyer. They're not supposed to say that. But hey, FBI agents have their own incentives to build cases. They're going say, I should have watched more law in order to understand. I could just take their card, but I was scared. They called me a cab to the office. They told me I could only tell my wife, nobody else. I immediately violated that. My second confession after our CIA was Tuesday afternoon at St. Patrick's at lunch. I get in line. I had gallows humor. I wrote, How many other hedge fund people are here in line for a confession? I sat down with the priest, and I think he honestly saved my life. He said, Hey, it sounds like 99% of your life. I started with my My life story, and I got to the trade. He's like, Get to it. And he said, Basically, your penance is to help the FBI. Now, I should have talked to a lawyer. I didn't talk to a lawyer for almost two years, but I talked to the priest.

And then I said, Now I have to tell my wife. And I waited till Friday, after work. I didn't want to see her. I was having panic attacks, bed sweats, and she's wondering what's going on. She's texting me. I said, Oh, the market's crazy, which was a good excuse. I'm working so hard. Friday after work, she was working at Lehman Brothers. So people are familiar with that went to zero. She's under stress. I said, Let me go first. A young couple in New York City, a glass of wine before dinner. You got to sit down. I told her everything. Tuesday morning, the FBI approached me. I remember accepting responsibility. Yes, I made these four trades. I didn't try to tell lies or white lies. I just said, I did it. She said, Can you say it again? I said it again. She said, You didn't do anything to hurt me. Ryan, 85% of marriages I found this stat when I was researching, and more right there because she had every right to leave. Say, I don't know who you are. We just got married. We didn't have kids. It would have been easier just to hoist the sales and say, You're going to be Tipper X, not the future hedge fund manager.

No, thanks. It wasn't easy, but she was able to accept it as best as she could that day, which I think really... I don't even want to think about if I was kicked out, what spiral I would have been into. So I was very lucky that she accepted it.

Oh, man. What did that mean to you? What does it currently mean to you to have that rock there, especially when you're going through the toughest thing of your life?

Yeah, I think about it. I made four very bad decisions on the trades, but I made the most important decision, which I argue for anybody in my life, was a good decision. We just passed 20 years of marriage, 2025. When I was interviewing her. It's pretty surreal to interview your wife for your memoir. So 2025, I figured I had to interview her for her perspective. And I said, What was it like for you? And she set me straight. She said, Tom, thanks for asking because you never did. And she was correct. I was so consumed with myself. Once my name became public as Tipper X, this FBI informant, I was so concerned with myself. And she was like, hello. I was here the whole time with the kids, going to work. She was holding down work while I couldn't work. I blew a complete hole in our family financials because I couldn't work. And we had bought the house on double income. We were trying to stay positive. And I just felt like I just couldn't believe how she handled it so well, just interviewing her just last year for something that happened quite a long time ago.

And she said, We've had good times, we had tough times, but we never had bad times. So what do you mean by that? She said, Well, bad times, we would have turned to each other. I would have moved out. So we had tough times, but not bad times because I knew who you were. And so I hope people see the real hero of the book is not me.

When you make those four bad decisions, though, wouldn't it erode trust? I know you didn't do anything to her directly, but you did make bad decisions. And some would say, I might say this, well, if you could make bad decisions there, you're going to make bad decisions in other places that are really important. That can be a tough thing when it comes to the foundation of a relationship, which is trust.

Oh, 100%. I think that's usually why the marriage ends, because if you cheat here and it's a lie of omission, not mentioning it, where else would he be cheating? To your point, I think that's why most marriages dissolve, because then the trust is lost in the marriage. I had to work hard. Again, interviewing her, my wife, last year, she said, All I remember is you accepted responsibility immediately. You didn't make up excuses. So that was just, I guess, a feather in my cap. But it was rocky. She was able to work, thank God. But as I wrote, I was a stay-at-home dad at some point. We started our family. I was still in the shame spiral. There was one point where I saw there was a major bank, years later, who was laundering money for El Chapo. Nobody was arrested, no felonies. They just paid a fine. And I said, Sue, can you believe this? These people are laundering money for El Chapo in New York, and they're going home to their Brownstones. And she said, Hey, is that helping you find a job? So talk about a woman that can just put you back in your place.

That's what I needed, too.

You go on to wear a wire. What are those conversations like? Where are you going? Where are you meeting these people? I'm thinking of good fellows, and they really speak poorly around about the snakes or the people who help the FBI. I don't know what that's like. I'm That's fascinating. What is it like putting on a wire and going to have a conversation knowing the FBI is listening and knowing you might help put this person away? I mean, man, what was that like?

So I told her Friday, and I said, Monday, I have to have lunch with the FBI. Had my first lunch with the FBI after the Wendy's meeting. There was a small piece of metal on the table, and I was just so naive. I said, Is that an extra Blackberry battery? And they were probably looking at me, No, this is a recording device. I said, Is that a body wire? They said, Yes, we want you to help us build cases. It's going to help you out. And they played up to my patriotism. You're doing this for your country. It wasn't for that. To be honest, it was just to help myself, just to maybe not have dire consequences at sentencing. But it was a weird situation because I had to build relationships with people. Usually somebody that wears a wire in a case, you would have to think about, would I wear a wire on a friend? There was one case where a guy wore a wire on his best man in his wedding. I'd like to think I wouldn't do that, but the woman that tipped me and the guy I had tipped, I had already worn a wire on me.

So I said, How do I help you? And they said, Who are the worst actors? Now, Tom, here's your opportunity to help us. And so I just went with that. Hey, if I can help them, maybe it's something positive I could do. But I ran around. My first meeting was this guy in Silicon Valley. He would sit down. I would just get right to the point, nice to meet you. Remember three years ago when you made those illicit trades? If you were a target, Ryan, why is this guy asking me these questions about crimes I committed? I just met this guy. The FBI would be at the table next to me because they to make sure I wasn't sliding you a piece of paper. Hey, I'm wearing a wire. Don't talk to me, which would be obstructing justice. And so the guy would leave. I gave them the device. The next day, they'd say, Tom, you did a terrible job. I'm like, Guys, it's my first time doing this. There was no training in in the analytics class about wearing a wire. Eventually, the coaching I got was ask a question and to be silent.

I would always ask a question. The target would not say anything, and I would just fill it. They said, Ask a question, be silent, And then eventually, by the third meeting, people would just start saying enough, Oh, I have a contact inside this company. And they often looked at me as the younger version of themselves, where they're going to groom me into somebody who could be helpful for them. And the FBI would say, You're done here. I'll go on to the next one. But I could get to the scariest moment, too, where there was a guy high up the FBI's list who got me in 15 conversations. He would say nothing. He would always change the subject. I felt the wire must be huge in his eyes. He me Sunday afternoon, and he said, Tom, we need to have dinner tonight. We need to talk. I called the FBI. I said, This guy wants to have dinner on a Sunday. They got excited. They met me at the train station in Manhattan, gave me the wire. I took the train up to Connecticut He picks me up at the train station, and he says, Tom, good to see you.

I brought swim trunks for you. We're going swimming at my mother's house. The Sopranos, that was the final season that summer. So all these ideas are going through my head. I played a cool God in his car, said, Let's go swimming. We drive to this old mansion in Connecticut. He starts disrobing in this room. He wants to see if something's tapped in my chest. It was in my front pocket. Now I'm about to have a heart attack. I excused myself. Went to the restroom. I took the wire up, put it in my jeans, put these swim trunks on. So the two of us are walking out to this pool. It was so quiet. I saw a shovel against the house, a hole in the ground. I thought, Oh, my God, is this guy going to try to kill me or something? And he was just having landscaping done. And we got in a swimming pool, and he grabs a tennis ball. We're playing this awkward game of catch, so he's pouring it on. And after a while, he said, Tom, he spoke to a lawyer. He has one question for me. I was going to give it up, Ryan.

I just wanted to go home. He said, Tom, have you been approached by the SEC, which is the regulator? And truthfully, I could say, No, not the SEC. I was faltering, so I was trying to give him a hint, not the SEC. And he said, Okay, I just had to make sure you weren't wearing a wire. Sorry about that. He starts telling me everything. Of course, it wasn't recorded. And the FBI later would say, We can't use anything because it wasn't recorded. That guy was actually never charged. I couldn't believe it. He was one of the worst actors. So they arrested 81 people. There was another two dozen. I was shocked, weren't even arrested.

Oh, my goodness. So this is just rampant.

Yeah, it was everywhere.

How do you think it is today?

Today, I think it's better. I've been sharing this story for compliance training for nine years, so hopefully it's better. But I would be surprised if 20 hedge fund people were in handcuffs today in New York City. But I think what I see is the new behavior is often ahead of the stock market police or the regulator police. So today with prediction markets, a couple of weeks ago, we saw somebody make $4 million making a bet that we were going to get the Venezuela dictator. And so that was somebody who they think had information. So I think insider trading, it's one of the oldest economic crimes ever. It goes all the way back to the founding of the New York Stock Exchange in the 1790s, the first stock there was insider trading. So it's the longest economic crime. I just think it goes to prediction markets. I think that's a wide open area for insider trading if they want to bring cases. What happens today, too, is the bad actors and the stocks are more like organized crime sometimes, whereas my case, the woman calls me, I trade. That's an easy one. The harder ones are maybe even involving hacking or cybersecurity, where information is stolen from public companies and traded on by organized networks.

The SEC's budgets maybe $2 billion to prosecute. But when you have all these bad actors in the world potentially doing this, it just becomes an issue of resources. So the easy cases are brought, the much more complicated cases. Sometimes there's just not a push to go for those cases.

What about when you see people tracking politicians and what they're doing It seems like it would be illegal, but their track records of their networths growing a ton when their salary is 150 grand or whatever is wild. What do you think about that?

I think it's probably the most disgusting behavior. I see this when I speak at a conference, let's say they got you for four trades. What about XYZ politician? And it's on both sides of the aisle.

For sure.

And you'll see it. And what happens is they'll trade the stocks or the spouse will trade the stocks. Like Paul Pelosi will trade the stocks with Nancy Pelosi. And there's a Stock Act. It's only a $250 fine they have to pay. And it's like, All right, let me do the math. I'll make $4 million on NVIDIA call options to pay a $250 fine. And the Congress people can actually trade the stocks with the committees they're on. So Dan Crenshaw, he was on the meta TikTok thing a few years ago trading meta-stock, and he's on the committee. How is this even allowed? And so what I think has to happen, and I hope one of the big things from my book when it comes out is to have a bigger platform to talk about these issues. We have to find a bill to pass to stop Congress from single-stock trading. Eighty-six % of Americans agree on nothing. They actually agree in a poll that Congress should not be able to trade single-stock. So I hope I just have a bigger platform to actually write the bill and give it to a congressperson to get it through.

What happens, Ryan, is they have these 25 bills the last twelve years to stop this. It never gets to the President's desk. Every bill has a stipulation. If you own shares in a private business and you're running for Congress, you have to somehow monetize your private shares. And like, well, why would that one for Congress if I have millions of dollars in a private business? And we want more business people, I think, and less career politicians. So that has to be taken out. So I I should have it all written up. If I could just get it out there to people, I'm happy to talk.

I feel like that one would be popular with, I think, just everyday Americans. We don't like the thought of people cheating. I mean, that's what it is, and that doesn't feel good for everybody else. So I think that makes a lot of sense. Shifting again back to leadership and personal excellence. And I think when you're going through all this, you start running, is what I'm reading about, right? Punishing fishing your body in a way, running lots and lots of miles. You start with short races and you end up with really, really long races. How has running helped you?

Yeah. So at the time, I got quite heavy for my frame. I was always standing up until like classic guy, a bit 30s or something, and then not doing anything. It catches up. And I had a point where I was a stay at home dad in this saga, and I was carrying my daughter up the stairs and out of breath and went to the doctor. And of course, I hadn't been a typical guy since college. I know I'm 32 years old, and he does the blood work. He says, Oh, my God, you're obese. What? I'm sitting, No, you're obese, and your blood work's awful. What's happening? And so I told him my whole story for the first time. And I told my wife, and she again, she said, Hey, I used to be a soccer player through high school. I'm going to sign you up. Maybe you have some endurance. So she signed me up for a 5K race. I think just even crossing the line at the 5K, and she beat me pushing the jogging stroller, it just lit a fire. Oh, my gosh, I accomplished something. I just felt I was in such a shame spiral.

But then it became a mania for me. 5ks went right to marathons, and marathons became ultra marathons. I got up to the point when I was riding, I went back at my running logs. There was a week I was running 140 miles. I was downloading Olympic training plans for Runner's World and saying, I can do this. I would run twice a day. But also, Ryan, as I was thinking about this, I was using running as a crutch to not have to deal with what I had to deal with. So Sue would come home, How's the job search going? I got a race to train for. I've got this ultra coming up. So in many respects, I got very fit, and that was good. And it got me out of my own head. But also, it wasn't helping me move forward. I was doing way too much of that. I wrote in the book, this first 100-mile race I did was around a one-mile loop. You think about what headspace I was in to run 100 miles I run a one-mile loop. I don't know. I read Dante's Inferno. It was probably one of those nine circles of hell I was doing right now.

And you pass your car every time. And by Mile 78, everything's breaking down. I had Rabdo where you're really things are breaking down in my body. I said, I'm done. I popped the trunk to the car. There was an air mattress. I said, I'm going to just take a nap. My race is over. Sue had left a note there, and she said, We didn't sleep on you. You can't sleep on us. And so I closed the trunk, finished the 100-mile race. And we were talking earlier about how she even stayed with me. That was just proof point to me that she's going to stay with me, but only if I get my act together. After that, I said, I'm never doing ultra marathons again because I was not doing it in a healthy way. And now I just run for fitness. So it's much more healthy relationship running.

It seems like you're a guy of extremes. Is that accurate?

Yes, that's 100%. That's what my wife says all the time. Yeah, that's right.

How does that help you and how does that hurt you?

Even looking back, because I was writing the book, just I had this tremendous ambition coming out of from Georgia, like unbridled ambition. I applied to this Ivy League College. Nobody from my high school ever went to an Ivy League College. And then I got the fur and I started making up business clubs. I was the President. Just to get in. I had this unbridled ambition that eventually caught up with me in my career. Today, I would say I'm much more aware of that. And so I try to check myself when I'm getting a little bit too crazy about the newest thing, whatever that is for me. And so I just try to have a little bit more balance in my life. But I also... I'm of two minds because I think a very balanced life is boring, and I want to have something that I'm really obsessive about, but I don't want it to be the detriment to my other relationships or my other pursuits. So it's an ongoing process I'm working through I run less, and now I'm into master's boxing. And this is just something new for me, like combat sports and Tom did not mix.

So I've never, ever thrown a punch in my life. And boxing, you learn how to do all that. But I have a better relationship, just, I guess, with my new sports or my new endeavors to try to have some balance, but also to be challenged. There's nothing like doing hard things because you learn so much about yourself. So that ultra marathon, there was negative, but I also learned so much about myself that I can do things. And maybe when it got to the point in the book where I had to start a speaking business because we were running out of money, I said, I can do this. I can actually accomplish things because I put my body through that. So it's trying to find a balance, but I don't have a great answer.

How does doing... I'm a firm believer in this, so I want to hear from your perspective, but I think doing hard things can create portable lessons, meaning you could take what you learn from, whether it's a marathon, ultra marathon, getting punched in the face regularly as you're doing now. How does that help you? How is that portable to other areas of life?

I think it shows me that no challenge is insurmountable. I just like the growth that I feel when I start to take on something that seems insurmountable. I told my running group, Guys, I'm tired of training for marathons. I think I I'm going to get into something else. Oh, do you want to go cycling, Tom? No, I think I want to get punched in the face. What? Yeah, because that is the most uncomfortable situation I could ever imagine being in. But then the learnings from that, it's a little bit, not a drug, but a little bit like, Okay, what's the next I can go after to have that feeling of just accomplishing something or just taking on something. It's interesting that we're talking about this because I don't really think I have a fully developed idea in terms of what this is going to lead to, but I just know I feel like I learn and grow a lot as a person. I just can't be status quo, not challenging myself.

Are you ever scared, though? I mean, you were a wire a lot. Do you ever look over your shoulder and say, Hey, I know this isn't Sopranos or Goodfellows, but I don't know, that's what I I think of when I think of wires. You ever have those feelings?

I was concerned. So back to the Tipper X story, I did this for two years, and eventually, I didn't know it was leading anywhere, classic FBI agent, no feedback. 2009, they said, Turn on CNBC, Tom. 20 people are in handcuffs in the middle of the Wall Street Journal. All their names are out except for one name. And they called that name Tipper X. I didn't know I was Tipper X. I'm an analyst, so I figured it out. Oh, it's probably me. And so I was scared that day, Ryan, because I thought, these people are means. I mean, they could pay somebody 5,000 bucks to do something bad to me and be nothing to them. And my name became released two months later. I got some threatening calls, emails. I always forwarded those to the FBI to look into, and they said, oh, you're fine. So I actually just trusted them. I sometimes Google people in these cases, and most people, actually, it's interesting, have scrubbed anything bad about them. There's a way, I guess, to do that now off the Google. And I get these reputation management emails all the time now from AI bots.

Mr. Harden, we found something bad about you on the internet for a certain price. I'm sure they would take it off. I have some fun. I reply and say, Here's tipperx. Com. Here's all the bad stuff. What do we do? And they couldn't figure out a plan with them because why not own it? Why not try to help people? I can't change the past, but I could have a windshield mentality where I'm only looking forward and not in the rear view mirror. And actually late, a lot of people in their 20s do stupid stuff. Now, maybe not to this degree, but now in my 40s, I can look back and say, There's actually a lot of lessons I can learn, we mentioned with my kids. Why not just embrace it rather than try to scrub it off the internet? Right in the book, one of the big things I figured out was the integrity gap between we are so focused on our reputations, whether it's social media or companies have reputation management they spend millions on when we often neglect our character. In reading Stan McChristel's book last year on character, he talks about that more.

And I thought, Oh, my goodness, I would love to have Stan read my book. I cold-emailed him. 28 hours later, he responded he had read the whole thing and gave me a phenomenal endorsement. It was just an amazing moment for my life, a full circle moment in my life to be able to get somebody of that status to actually read the manuscript and understand it. That's something I call the integrity gap in the book. Your reputation is what people think you are. Your character is what you are in that gap. Those rationalizations we talked about often fill that gap and try to close the gap over time.

When you think about your character, what are some of the things you do intentionally to live and lead a high character life?

So one of the things I'm very attuned to is any time today I'm rationalizing a decision because I went through that in a very negative way as a young man. And so when my wife and I have big decisions to make or even little things, I have a rationalization journal. So I don't really call it a daily journal because it's not daily. But I'll write those down and maybe once a month reflect on those and why did this pop into my head What did I do about that? And what can I learn from it? And that's just checking myself in terms of everyday decisions, because I know even having gone through this, I'm still susceptible of going down another type of slippery slope. Hopefully, it's not a federal crime, but it could be something else in our life with our family. And if I'm not just meditating on that a little bit and thinking about those rationalizations, I think for me, that's going to just improve my character over time or just make me more attuned to that, those passing thoughts in in my head.

Let's say you were teaching a class at an Ivy League school like you went to, and it was titled Being an Effective Leader. You've learned from ineffective leaders or leaders with low character. Now that you've had this exposure and these experiences, I would love to hear what are some of the topics of that class you'd be teaching of being an effective leader? What would be on that syllabus?

I think for me, some of the most effective leaders I've had the opportunity to engage with their teams, I would say they're almost like servant leaders where everybody can speak up, Hey, I'm just another person at the company. Leadership is not so much by the title as it is by just how the person behaves. I would just say, these are my mandates for the company, but hey, please speak up. If you have questions or disagreements, we're all on the same team here. You have to create that psychological safety inside the organizations so people can actually check you. As I do my workshops, we'll just workshop this where a leader has a new goal. Then the table, one table, works as their biggest competitor, so how are they going to challenge that? Then one table works as the junior employees challenging that. We go around the tables, we have them challenge the leader, and it's a controlled, safe environment. My hope is that actually changes behavior going forward in a good way. Also, going back to our earlier conversation about what culture is, it's not what you say. Even us as parents, Our kids actually see what we do, not what we say.

And it's the exact same thing, what your behaviors are as a leader, what behaviors you're rewarding. And it's an advising, not what you say, it's what you do.

I love that element of rewarding the ones who are doing it right, especially in corporate America. One of the companies I work with called Insight Global, it's cool that I just thought of them when it comes to this. They do this giant titan trip. And to be a titan, it has nothing to do with your financial performance. It has everything to do with living out the company's shared values. And they spend an insane amount of money on this titan trip. It just happened. So it's top of mind. I was talking with one of the leaders who were there, and it's amazing to see these people celebrated for living up to the shared values. And I think that's something all companies can learn from this. That's legitimately putting millions and millions of dollars behind something that doesn't necessarily have any... Now, I bet those people probably do well and add revenue to the company because they're living out the values, but that's not why they're there. They're there specifically because of that. I think all companies, and I'd be curious to hear what you think of this, all companies would be better served if they really care about high character and living out those values of doing things like that, where you're honoring those people who live them out.

I think that's 100 % correct. You can't just be, again, ambiguous messages or just focused on short short term performance, just focus on what the dollar goal is. You have to understand how the business was made, what was behind the performance. You also have to, I think as a leader, to share your own ethical dilemmas that you've worked through in your career, because we've all been in situations where we could make a decision to go left or right. And then how did you work through that as a leader? You have to be... But that also takes vulnerability, and sometimes people don't want to be too vulnerable in front of their people. But I think that makes you more endearing and a better leader to actually share your own flaws or just decisions you made or bad mistakes or bad decisions you made through your career, because then it's all learning for employees. But I think you're correct. We can't just... And because I came from financial services, I think there's so much more focus on what's the number, what's the revenue, what are we producing for clients, and not so much of a discussion as to how do we actually get there?

Because how you get there is like the sustainability of your career. If you're just focused on the short term, just the numbers, you have the opportunity to potentially get in a situation like me. It could be a totally different facts and circumstances, but it could be the same type It's a slippery slope.

I was reading the end of your book, A business school professor calculated you would have made $23 million if you'd stayed on the hedge fund path. Your daughters joke with you about it. You're on a cruise ship and you're right. But I ended up with something better. What is that?

Yeah. Something better is I ended up not with the life I had planned for. I had planned my whole life, coming out of high school, Ivy League, hedge funds. That was all the plan. That was going to be a hedge fund billionaire, like the people I read about in magazines. And then in the end, I got something better because it's not about the status, it's not about the money, it's about really just who I am with my family, with my relationships now. And it's not so much about status and money. I speak at that professor's class every year, and it's good for the students to see that, but it does make my stomach turn. I mean, a human being. It's not comfortable to see that every time, but it's a good example for the students because me personally, on those four trades, I made $46,000. And the students all look at me, so $23,046,000 to throw your career away. Why did you do it? We walk through all the rationalizations, but I think today that's where I am. Anybody in your 40s, your prior has changed from your 20s But I just have a longer view on things now.

One of the most important books I read in this process was Road to Character by David Brooks. He talks about eulogy virtues and resume virtues. I realized, wow, in my 20s, I was just thinking about those resume virtues, how much money this year, the next job, the next stepping stone. I never was content to just say, I'm in a good place now. I was always striving, and I never thought about the eulogy virtues. What are people going to say about... We talked about character at the end when it's all over because we all leave one way. Will people still be talking about four trades about 29-year-old Tom, or whenever the day comes for me, will people actually say something about the eulogy virtues, or something I think about today, now in my life.

The book is called Wired on Wall Street: The Rise and fall of Tipper X, one of the FBI's most prolific informants. Tom, thanks so much for being here. Where would you send my viewers, listeners, to learn more about you online?

Thanks, Ryan. Tipperx. Com. I just found out in the US Patent Office, I have a trademark now on Tipper X, so there can be no more Tipper X's out there. And I'm very active on LinkedIn writing, not just showing my story, but just sharing a lot what we talked about today, Ryan, about Cypriot Slopes. I hope leaders can read my little newsletter on LinkedIn and get something from it every week. I try to write every Monday.

Awesome, man. Well, I appreciate you and your team sending me over early copies of the book. I had not heard of this story prior to this, and I just thought, what is this? It was really cool to see that you just lay it all out there. I appreciate that very much. It was eye-opening and enlightening, and the fact also that you're super vulnerable with all of it, just willing to share for the benefit of others and helping. And certainly, you're building a career and getting after it. But I found that to be and helpful, and it seems like you're as straightforward as it gets. So thanks so much for being here, man. I'd love to continue our dialog as we both progress, man.

Absolutely. Thanks for having me, Ryan.

It is the end of the podcast club. Thank you for being a member of the End of the podcast club. If you are, send me a note, rian@learningleader. Com. Let me know what you learned from this great conversation with Tipper X Tom Harden. A few takeaways from my notes. Think of somebody on your team who does it the right way, who lives out your values and recognize them publicly, shine a bright light on their specific behaviors. That is how culture is built. It's by celebrating the people who do the right thing the right way, even if it costs them or the company from time to time. Find someone perhaps who lost a deal but did it because they refused to cut corners. That's why I share I shared that Insight global story of the Titan trip. I love seeing the Titan celebrations. It's all about the people who are living the shared values and then celebrating them in a huge way. Then the difference between mistakes and bad decisions. Mistakes can be accidental. Bad decisions are intentional choices that go wrong. They are bad decisions. I like how Tom replied to that question. That language, it changes That's how you coach, how you hire, how you fire, how you build accountability.

Tom uses it with his teenage daughters. You can use it all the time, whether it's at home or at work. Then start a rationalization journal. I've never heard of this. I heard of Gratitude journals or Daily journals or Matthew Dicks's Homework for Life, but a rationalization journal is different. Tom keeps one. When you're about to make a decision that needs justifying, write down the justification. If you're working really to explain it to yourself, then maybe that is a warning sign. I want to say thank you so much for continuing to spread the message and telling a friend or two, Hey, you should listen to this episode of the Learning Leader Show with Tom Hard, and I think he'll help you become a more effective leader because you continue to do that, and you also go to Spotify, Apple Podcast, subscribe to the show, rate it, hopefully five stars, write a thoughtful review by doing all of that, you are helping me do what I love on a daily basis, and for that, I will forever be grateful. Thank you so much. Talk to you soon. Can't wait.