“Tipper X” Helped Prosecute Friends in Big Insider Trading Case; Now He's a Stay-at-Home Dad

For nearly seven years, Tom Hardin has been living with being "Tipper X," a seminal informant in the biggest insider trading case in a generation.

He wore a wire and contributed to over two dozen convictions, including prosecutions of friends. He pleaded guilty himself and has been out of work for years. Yet as he sees it, that's only part of what happened.

"I am my own undoing," Hardin said in an interview this week, but "there have been a lot of positives that have come out of it."

He lost his finance career and has a felony record. But he found new roles as a community volunteer and father and new hope that his regret could help other people. The judge who sentenced him last month to time served — hours in custody earlier in the case — commended him for both helping prosecutors and setting an example of navigating "insightful trauma."

Hardin, 37, was an early and important cooperator in a case that ultimately encompassed scores of people ranging from financiers to lawyers to big-company employees, prosecutors said. Among them was billionaire Galleon Group hedge fund founder Raj Rajaratnam, accused of making $75 million illegally. He's now serving an 11-year prison term after the Supreme Court declined to consider his appeal.

Hardin was a managing director at another hedge fund. He said he felt he had lost out on earlier jobs because he didn't have an "edge": sources with secrets about companies they worked for or with. Then an investor friend, Roomy Khan, started to call in 2006 with tips she'd gotten from insiders, according to prosecutors' filings.

"At the time, I'm thinking, 'I'll just take some crumbs off the table.' You don't really think about it as a crime," Hardin said. And it was exciting to have that inside edge.

Between then and September 2007, Hardin made his fund about $1.7 million and himself $46,000 by capitalizing on a handful of secrets from Khan and others about such companies as Google Inc. and Hilton Worldwide, the government said. Hardin also passed along tips and collected $30,000 to pay Khan's tipsters.

Hardin was dropping off his dry cleaning when two FBI agents approached him in July 2008. He immediately owned up and started cooperating.

Hardin recorded phone calls and meetings with various people — authorities don't indicate they included Rajaratnam — and even went to California to gather information, prosecutors and Hardin's lawyers said in filings. Some people Hardin implicated then provided evidence against additional suspects, prosecutors said, and Hardin enhanced their leverage in dealing with Khan, who became their star witness against Rajaratnam.

"Hardin's cooperation was exceptional," prosecutors said in court papers.

Hardin declined to detail his work on the case beyond what's in public filings. But he said he felt both relief at coming clean about illicit secret-sharing and "tremendous guilt" about implicating friends and industry colleagues.

Lawyers for Khan and some others either declined to comment or didn't immediately respond to inquiries this week. Rajaratnam's attorney declined to comment.

Hardin lost his job amid the recession in early 2009, before the case became public that fall. Initially just called "Tipper X" in court filings, Hardin wasn't unmasked until December 2010. By then, he had secretly pleaded guilty to conspiracy and securities fraud charges.

Banned from the securities industry, he has yet to find other paid work. His wife works at a real estate development company, and the Westwood, New Jersey, couple taps savings to pay monthly bills.

For now, Hardin is a stay-at-home-dad to their daughters, 5 and 3, a role he never envisioned but now appreciates. Friends named him godfather to their 3-year-old son, saying they saw his life as a lesson: "Everybody makes mistakes, and how we handle those mistakes shows who we are," said the boy's mother, Courtney Stimpson.

But those misdeeds depressed Hardin for a while, he said. Meditation and running helped him climb out; he's now a vegan marathoner who gets up at 4:30 a.m. to run 100 miles a week.

Hardin ended up back in a headline in 2013: for being a local newspaper's volunteer of the month. He organizes leukemia fundraisers and helps run his church's anti-poverty efforts, including a 250-ton-a-year clothing donation program.

And his frank, emotional account of his crime and sorrow moved listeners at a church men's retreat, among them a retired FBI agent who wrote to Hardin's judge. It left Hardin encouraged about aiding others by drawing on his experience.

"People are going through much worse than I am," he said. "I guess I'm at peace with what happened."

Copyright AP - Associated Press
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