Tom Hardin: Ethics, Financial Crime, and Redemption | Rational Reminder 398

0:08 This is the [music] Rational Reminder podcast,

0:10 a weekly reality check on sensible

0:11 investing and financial decision-making from two Canadians.

0:14 We're hosted by me, Benjamin Felix, chief investment officer,

0:16 and Dan Bordalotti, portfolio manager at PWL Capital.

0:20 I

0:21 think we got a good episode today.

0:22 think we got a good episode today.

0:22 think we got a good episode today.

0:23 Yeah, this is a this was a it was a Yeah, this is a this was a it was a

0:25 Yeah, this is a this was a it was a different episode.

0:26 Um, now this podcast we we we try to make

0:28 episodes that are about sensible investing and financial decision-making.

0:32 And this is a bit of a different angle on that, but I

0:35 think it still very much fits with the theme of the podcast.

0:40 So, we talked to Tom Harden, who is also known as Tipper X.

0:47 Uh, Tom was an informant for a massive securities fraud investigation.

0:51 Tom was actually uh arrest arrested.

0:54 I mean, he was an an informant because he got busted uh for securities fraud.

1:01 And yeah, so we we talked to him about his his experience,

1:05 but also it's just a it's a conversation

1:08 really about about ethics and about how the line

1:13 between what's right and what's wrong can kind

1:17 of blur depending on the environment that you're in.

1:20 and the path that that led Tom down.

1:23 Uh I just it's fascinating to hear and as we

1:26 said can't remember if I said this in the recording

1:28 or or afterwards to to Tom but you when I read

1:32 his book I couldn't help but put myself in his shoes.

1:34 He's in all these unbelievably difficult situations where he's making

1:38 really tough decisions and it's it's quite an experience reading reading

1:42 the book and imagining yourself in those in those situations

1:44 especially for me as someone who works in in that field.

1:48 Uh anyway, what what did you think Dan?

1:51 Yeah, I think I mean when you when you Yeah, I think I mean when you when you

1:53 Yeah, I think I mean when you when you read

1:54 the book and when you talk to Tom, you know,

1:56 we sort of realize that uh and and he talks about it too, you know,

1:59 he didn't wake up one day and decide that he was going to break the law.

2:02 Uh he was in a pressure cooker of an environment um with a lot

2:07 of people around him that were blurring

2:09 the lines about what was ethical and what wasn't.

2:12 Um gradually got dragged into that.

2:14 um made some mistakes which he is very upfront about admitting

2:19 and owning which I think really makes his story very compelling.

2:23 Um and then the other part of the story

2:26 as we're going to talk about is what happens

2:29 after he gets caught and how you know I

2:31 think he's redeemed himself in the years since then.

2:34 Um but a really compelling guy and a great

2:36 story that I hope uh I hope listeners will enjoy.

2:40 Yeah.

2:41 Yeah.

2:41 And Tom does have some great Yeah.

2:42 Yeah.

2:42 And Tom does have some great Yeah.

2:42 Yeah.

2:42 And Tom does have some great comments near the end

2:43 about whether hedge funds make sense for retail investors.

2:47 And uh yeah, we we very much agreed with what he said there.

2:50 Uh so Tom Tom Harden spent a lot of his career as a financial analyst.

2:56 Um and then in 2008 as a part

2:59 of a a cooperation agreement with the US Department of Justice,

3:04 he assisted the US government in uh understanding how

3:07 insider trading was happening in the financial services industry.

3:10 And he did that by being an informant

3:12 and his his kind of code name was Tipper X.

3:16 Uh so he helped to build over 20 of the more than 80

3:20 individual criminal cases in oper operation perfect

3:24 hedge which was a massive campaign uh Wall Street cleanup campaign that ended

3:29 up being the largest insider trading investigation

3:31 of a generation is the way that it's uh the way this it's described.

3:36 U so he was he was busted.

3:37 He made four illegal trades.

3:40 He gets busted for that.

3:42 The FBI approaches him and asks him

3:45 for their help in investigating other people.

3:47 They put a wire on him and he's going

3:50 to talk to other folks in the finance industry about,

3:53 you know, the insider trades they might be doing.

3:54 But it's it's it's unbelievable to imagine yourself in that situation.

3:59 But Tom spends a bunch of time doing this and he's involved uh

4:02 very closely in a bunch of uh a bunch of those those busts.

4:07 And then this is kind of the redemption story

4:10 and and this is the the aftermath that you mentioned, Dan.

4:15 He eventually gets invited to speak to the FBI New York City office uh kind

4:22 of about his his experience and about him

4:24 being an informant and all that kind of stuff.

4:27 And he kind kind of realizes at that point that he has

4:30 a really interesting story to tell and that he's actually a pretty good speaker.

4:34 and he has made this into his sort of second second career now that he

4:38 can't he can't work in finance anymore because

4:41 he you know was busted for securities fraud.

4:43 That's a that's a oneanddone type deal.

4:46 Uh but now he's quite a prolific professional speaker uh that he tells a story.

4:50 He talks about ethics.

4:51 He talks about uh professional cultures

4:53 and and how they translate into ethical behavior.

4:57 It was really fascinating.

4:57 And he's got a book coming out uh

5:00 in in February titled Wired on Wall Street, which Dan,

5:04 you and I both read to prepare for this conversation

5:06 and figure out what to talk to Tom about.

5:10 Um so that's it.

5:11 He's got a a bachelor's in science in economics

5:13 from the Wharton School at University of Pennsylvania,

5:17 which he talks about in his story.

5:17 It was he he never expected to get into an Ivy League.

5:21 you know, that that may have contributed to him feeling out of place

5:24 may have contributed to the the way he eventually ended up behaving.

5:29 Um, so I I found his book riveting, honestly,

5:32 just because it takes you through it takes you through an experience

5:36 that most people will never go through and it really puts

5:39 you in the shoes of someone who had to make a lot

5:42 of really tough decisions and live through some really difficult times.

5:45 Um, and I think a lot of that comes out in this conversation.

5:49 Yeah, I was going to say that the tenor of the conversation is very much like

5:53 the voice in the book and so I think

5:54 the two of them are really complement each other.

5:57 So, uh, listen to the interview and, uh, then go out and read the book.

6:01 Yeah.

6:01 All right, that's good for the Yeah.

6:02 All right, that's good for the Yeah.

6:02 All right, that's good for the intro.

6:03 Sounds good.

6:04 Let's go to our

6:04 Sounds good.

6:04 Let's go to our Sounds good.

6:06 Let's go to our conversation with Tom Harden.

6:10 Tom Harden, welcome to the Rational Tom Harden, welcome to the Rational

6:11 Tom Harden, welcome to the Rational Reminder podcast.

6:13 Thanks for having me on, Ben.

6:14 It's a Thanks for having me on, Ben.

6:14 It's a Thanks for having me on, Ben.

6:15 It's a pleasure to be here.

6:16 So Tom, I'm going to start with a question

6:18 that we've never asked one of our guests before.

6:20 What crime were you convicted of?

6:23 Yes.

6:23 So I plead guilty to one count of

6:25 Yes.

6:25 So I plead guilty to one count of

6:26 Yes.

6:26 So I plead guilty to one count of securities

6:27 fraud and one count conspiracy to commit securities fraud,

6:32 which is insider trading.

6:33 Between 2007 2008, I made four illegal stock trades,

6:39 uh, which netted me personally $46,000.

6:41 And for that price, I threw away my career at 29 years old.

6:47 Wow.

6:47 Now, I mean, that's an interesting segue because I wanted to we noticed when,

6:52 you know, reading the book early in your life,

6:54 I mean, you were very much a a buy the book,

6:57 follow the rules guy from from the way it sounds.

7:00 And there's even this story in in your book and you

7:03 can share a little more detail when as a teenager

7:06 you were a soccer referee and you were put

7:08 in a position where you had to enforce a relatively obscure rule.

7:12 But I think it was a good way of kind of demonstrating,

7:15 you know, your commitment to being a rule follower.

7:18 So I wanted to to ask you a little bit about when did you realize

7:23 that Wall Street was not really a place for that kind of rule following culture?

7:28 Yeah.

7:28 No, thank you for for highlighting Yeah.

7:29 No, thank you for for highlighting Yeah.

7:29 No, thank you for for highlighting that just to start the book.

7:30 Um, I grew up in in Georgia in the 80s and 90s and by 12 years old,

7:35 I wanted to get my my first job and at that point

7:38 you could actually be a soccer referee if you could pass the test.

7:41 That was the youngest age and I passed it and it was

7:44 really into into doing that as my job through through high school.

7:46 Uh, but of course, like you said, that's you're you're enforcing the rules.

7:50 Um, I got to uh referee officiate adult

7:53 league matches over 30 league and in the over

7:56 30 league uh you can't slide tackle because it's old people in uh they

7:59 could get injured and there was a team that was slide tackling and I gave

8:02 them I think it was three or four red cars and got chased in my car.

8:05 There was a language uh barrier I was trying to explain

8:07 the rule and they think they thought I was making it up.

8:09 So this is just uh one story from my childhood

8:13 where I was really focused on, you know, enforcing the rules.

8:15 And I think as I got into Wall Street, so I got into an Ivy League college.

8:19 I didn't really think that was going to happen,

8:20 but I was persistent about u bombarding the admissions committee at UPEN

8:24 back when email was invented really in the in the mid '9s.

8:27 Just sending them an email every weekend with every random update.

8:31 And I think they finally just let me in because

8:33 uh they were tired of uh hearing from me.

8:35 And so they let me in and got to my career in investment banking.

8:37 And then um you know I really think my first

8:41 time on Wall Street that I felt the ethical

8:43 lines were fuzzy or when we were taking a company

8:46 public uh 1999 so this the the the tech stock bubble back then and I was working

8:52 on the financial model as an analyst and trying

8:56 to adjust the adjusted EBID da and so I'm

8:59 sure many listeners will know what adjusted IBIT DA is.

9:02 I described it in the book as trying to turn

9:04 turn a 200 car pileup into a Disney parade.

9:06 So you're trying to make it look as good as you

9:08 can for the client and it's all about, you know,

9:12 we're we're our duties to our client and making their numbers look

9:14 as good as possible for for the IPO um irregardless of gap accounting.

9:18 So that was my first taste of maybe not everybody plays by the rules.

9:23 Yeah, it's interesting.

9:24 So you kind of

9:24 Yeah, it's interesting.

9:24 So you kind of

9:24 Yeah, it's interesting.

9:25 So you kind of get a taste of IBIDA adjustments and you know,

9:27 you kind of see may maybe bending the rules is

9:29 a little bit okay because everybody's kind of doing it.

9:31 Can you talk about how things changed though when

9:33 you went from in investment banking into hedge funds?

9:37 Yeah, so in banking it was just Yeah, so in banking it was just

9:38 Yeah, so in banking it was just grinding.

9:39 I'm sure you have a lot of investment banking analysts or who you

9:42 know at one point in their career uh listen to the show and you,

9:43 you know, you're building models,

9:44 you're creating pitchbooks, you're executing deals.

9:47 It's pretty exhausting, but you've got, you know,

9:49 you've got your team, your hierarchy, your process.

9:52 Hedge funds was really just the total wild west.

9:54 Going back then, I would say uh the rules were looser.

9:58 They were less regulated.

9:59 the bets were way bigger and the pressure was a lot more intense because you

10:03 were compensated in the hedge funds um

10:07 directly to how you performed which I like.

10:09 There was no BS whereas in banking you got comp for you know how hard you

10:14 worked and so in hedge funds you only

10:16 got paid if you were right about your trades.

10:18 So I did like that because it was just a flat you know meritocratic structure.

10:22 Um I I didn't use the analogy in the book

10:24 but I always think about it as a basketball team.

10:26 Maybe there's 12 players, uh, flat organization.

10:28 If you make your shots, you get compensated.

10:30 If you miss, you get you get, you know, fired.

10:33 Or, um, you know, with me, that's the situation.

10:35 But I liked it because you were compensated by your your your stock picks.

10:41 And when did you realize that, you know,

10:44 trading on in inside information wasn't just something

10:47 that happened at the fringes from time to time,

10:49 but a systemic issue in the industry?

10:53 Yeah, it was interesting.

10:53 Uh so as a Yeah, it was interesting.

10:54 Uh so as a Yeah, it was interesting.

10:55 Uh so as a young analyst 22 23

10:56 years old I attend conferences out in Silicon Valley.

10:58 I covered tech stock.

11:00 So I made you know numerous trips throughout the year to um Silicon

11:04 Valley tech stock conferences where public companies

11:06 would present their stories and then we

11:08 would meet with them one-on-one to try to uh figure out if we wanted

11:12 to own the stock or or short the stock or do or do nothing.

11:15 At that time early 2000s there was certain groups of investors like me

11:21 analysts who would share information amongst

11:25 themselves from their contacts inside these companies.

11:28 And the way I described it in the book it was almost more ethnically divided.

11:33 So you had what we called uh the Indian mafia.

11:36 So Southeast Asian folks uh that would share information.

11:39 uh the Chinese mafia would fly back to to Taiwan and get

11:44 information from Taiwan Semiconductor so they

11:46 could trade their their customer stocks

11:48 and then you also had uh a mafia in Boston uh trading uh

11:52 the stocks with inside information on on Boston tech stock tech stock companies.

11:57 So, you know, I know 22, 23, 24 years old,

12:00 this is going on, but I wasn't really part of any of these insider sharing,

12:04 insider trading mafias.

12:06 Like, I was just focused on uh analyzing a business, uh,

12:09 looking out, you know, a few years and doing that financial modeling,

12:12 but I also became aware, you know,

12:14 that this was happening in the industry and people just

12:17 talked about the contacts they had inside companies giving them information.

12:20 It was pretty much pretty brazen, um, you know, at that time.

12:25 Can you talk about the magnitude like how much information was flowing

12:28 through these back channel information networks when you were in that world?

12:33 It was pretty massive.

12:33 On the surface It was pretty massive.

12:33 On the surface It was pretty massive.

12:34 On the surface level,

12:34 you have these legitimate today we call

12:36 them expert networks um connecting investors with consultants.

12:40 But even then the lines got very blurry where people

12:43 started paying consultants who still had access to to companies.

12:48 Uh, one of the insider trading kind of networks I

12:51 helped the FBI with, we'll talk about later, was uh,

12:53 Primary Global Research was an expert network

12:55 and they were just basically tipping investors on uh,

13:00 earnings announcements that were coming up or or M&A activity.

13:03 So you had these informal networks.

13:05 I mentioned the insider trading mafias and uh you know some people would

13:10 just get information fed directly to them from from these uh insiders they had

13:15 in these companies or the hedge funds would hire analysts to work for them

13:18 who would work for these tech companies to to call back to their their contacts.

13:22 So this was I would say it was pretty rampantly going on for hedge funds

13:27 focused on uh tech stocks because tech

13:29 stocks have so much volatility around these announcements.

13:32 um you know either their earnings announcements uh

13:34 four times a year or their their M&A.

13:38 Now let's talk a little bit about the line there because

13:41 you describe in the book how you did these real deep dives,

13:45 very thorough fundamental analysis.

13:47 You're meeting with the directors of companies.

13:49 You're traveling, you know,

13:51 around to to meet with the stakeholders to get the best information you have.

13:56 Surely at some point you received some bit

13:59 of information that was a bit of a gray area.

14:01 I'm not sure.

14:01 Is this actually insider information or am I just

14:05 talking to the right people at the right time?

14:07 Can you talk a little bit about how that edge blurs and how you were

14:12 able to really distinguish between what's an illegal

14:14 edge and what's just good fundamental analysis?

14:18 Yeah, it's a great question.

14:19 So, my job Yeah, it's a great question.

14:19 So, my job Yeah, it's a great question.

14:20 So, my job as an analyst was to interview

14:22 sometimes the same people over and over again,

14:23 you know, every quarter or even more than that.

14:27 uh usually investor relations representatives or chief financial officers.

14:31 And so I would call them up uh interview them,

14:35 ask the same questions every quarter.

14:37 And this is totally legal where you ask the same questions,

14:39 but you might get different answers.

14:41 Uh which are actually maybe uh not material to the average investor,

14:46 but it would be material to me

14:48 because they they answered a question differently.

14:50 Or it's the end of a quarter right before the quiet period.

14:54 Hey, George.

14:54 There was one CFO called George.

14:56 You you planning a vacation with the quarter coming up.

14:59 You're going to hang around.

15:00 Oh, Tom, I'm definitely hanging around.

15:02 Now, that probably means they have to close

15:04 some deals this quarter to make Wall Street's numbers,

15:07 but that actually said to me,

15:09 uh, you know, that's not illegal inside information,

15:11 so he's just hanging around, but I know what that means.

15:13 Or I call him at the end of the quarter or I see

15:16 him at a conference before the quiet period and the guy is sweating, right?

15:20 Not going on vacation.

15:21 Uh, sweating, so I know something's wrong.

15:24 Um, what's illegal and where this went was illegal

15:29 insider trading is if you receive information that's material.

15:32 So if it were public, so it's non-public, it's material.

15:35 If it were public, it would move the stock price.

15:39 And in the US and laws are different in different countries.

15:42 So don't take this to other countries outside the US.

15:45 But in the US, the third element of illegal insider trading

15:49 is the tipper of the information has to breach their fiduciary duty.

15:53 So you think about an employee of a public company

15:57 sharing information that they're not supposed to with an investor

15:59 or a trader or there's so many of these cases where

16:02 there's a relative in the market that they're tipping and trading.

16:04 And so that's the third element of illegal insider trading.

16:07 So that's kind of how the line is demarcated.

16:10 It can become very gray to the question because actually

16:14 there is no statute in the US for insider trading.

16:17 As I mentioned, I plead guilty to securities fraud

16:19 and that gives prosecutors in the SEC a very wide range

16:25 of al of you know situations where they can bring

16:27 a case and they don't always win all their cases, right?

16:30 Some of these cases are thrown out,

16:31 but once you're charged guilty or innocent, you know, your career is over.

16:35 So this is how these sort of cases were built.

16:39 Yeah, it's so interesting to think about

16:40 Yeah, it's so interesting to think about

16:40 Yeah, it's so interesting to think about that line where you

16:41 can be an analyst that's just grinding and like you said,

16:45 you can find these tells from the CFO and eventually figure out that yeah,

16:49 this is probably the case and you can make a bet based on that.

16:51 But if you get straight up like you know for a fact this is going to happen

16:54 and you get that information from someone that was

16:56 not supposed to give it to you, then it's illegal.

16:59 That's right.

17:00 And anybody listening

17:00 That's right.

17:00 And anybody listening

17:00 That's right.

17:00 And anybody listening that's an analyst, just talk to compliance, too.

17:03 Right.

17:03 So that's the that's the main thing.

17:04 Like you're going to be if you're a really

17:06 good analyst and you're digging and digging and digging,

17:08 you're going to be in situations all the time where it's not clear,

17:11 just escalate that to compliance so that

17:13 just escalate that to compliance so that

17:13 just escalate that to compliance so that they they can look

17:14 at the fact pattern and once you've done that, it's off your conscience, right?

17:18 That's up to uh the compliance team.

17:20 So a very very uh the compliance team.

17:20 So a very very uh the compliance team.

17:21 So a very very important takeaway.

17:22 Yeah.

17:22 No, that's a good good tip.

17:24 Uh

17:24 Yeah.

17:24 No, that's a good good tip.

17:24 Uh Yeah.

17:24 No, that's a good good tip.

17:25 Uh okay.

17:26 You talked about the meritocratic structure working in a hedge fund.

17:29 Can you talk though about how hard it

17:30 is to trade successfully consistently without having edge?

17:37 It's really hard to do it every year.

17:39 I

17:39 It's really hard to do it every year.

17:39 I

17:39 It's really hard to do it every year.

17:40 I always uh would say, hey, if you're going to hire an analyst,

17:43 give them three years to make your money because

17:45 some years are just going to be bad, right?

17:46 Some years it's not going to be your strategy or as we've seen

17:48 with software investors the last 12 months

17:51 has been awful because the market's saying,

17:52 well, you know, everything's going to be vibe coded, right?

17:54 So that's um so that's hard to do it every year.

17:59 Uh but I will say um I when eventually when I got those tips,

18:02 it wasn't because I was actually not beating the markets.

18:06 I was actually doing quite well.

18:07 So if you're in a situation where you have

18:09 the luxury of being able to look at a few years,

18:13 you can always take advantage of the dislocations

18:15 of the market from the short-term players.

18:17 And you should over time now looking at a three-year horizon,

18:20 you should be able to make money.

18:23 The challenge is as things are even today very

18:25 much much more of a short-term focus that becomes

18:28 much more difficult to to be very consistent

18:31 with your returns unless you have some type of edge.

18:36 So you you were exposed to edge a few

18:38 So you you were exposed to edge a few

18:38 So you you were exposed to edge a few times before you actually traded on it.

18:41 What finally pushed you to accept using some edge in one of your trades?

18:44 Yeah, in I shared in the book I got a kind of a random

18:48 phone call u from this guy I knew Gotham um who I knew early

18:51 in my career and he and he calls me and he's a guy um

18:55 I kind of felt bad the way I described him but it was just how

18:57 I remembered him sort of like calling only for your best ideas you know

19:00 somebody that calls you only for your best ideas and they never going to give

19:02 you anything in return always looking for something but it was the way it

19:07 was and now he's at a prop trading firm I couldn't believe he was

19:10 given capital to trade he's like a terrible trader but he calls me and he

19:14 says because there's a guy uh named Z at his firm nickname who is

19:19 just making a lot of money trading

19:21 stocks with inside information and he actually

19:23 tells me about a public company Adessa who's going to be acquired by a private

19:28 equity consortium in a few weeks and so here's the first tip I'm

19:31 receiving now it's not illegal to receive a tip only if you trade

19:34 on that or share something so I didn't do anything with it and then uh

19:38 a few weeks later the stock deal

19:41 actually happens as he described uh Gothan made,

19:43 you know, multiple six figures, maybe seven figures on this trade.

19:46 And I thought, "Oh my god,

19:47 is this this is the guy who's going to who's going to profit off

19:51 of this." And so that was the first time it was in my face,

19:54 uh, in terms of actually receiving a tip, seeing it happen, not acting on it,

19:58 but also it kind of plant the seed,

20:00 I think, for what what would happen next with me.

20:04 Yeah, it's a good segue because I'm wondering like

20:06 how much pressure you felt when you were, you know,

20:09 before you crossed the line and you're watching colleagues,

20:13 competitors making these profitable trades,

20:16 probably people who aren't very good, um,

20:18 but profiting on this illicit information and you feel

20:21 a little bit like the cyclist who knows the guys

20:24 in the front are all doping and I'm never going

20:27 to be able to catch them unless I do the same thing.

20:30 Did that kind of mentality enter into the decision?

20:33 Yeah, it's so interesting you mentioned

20:34 Yeah, it's so interesting you mentioned

20:35 Yeah, it's so interesting you mentioned that because

20:36 when you know Lance Armstrong in his way has

20:37 had his own sort of bounce back from his his uh days of winning tour to France,

20:42 it's the same type of thing where they're all doping

20:45 and I think there was one story he told where

20:47 the first 18 finishers of the Tour to France were

20:49 were all kicked out or something until they found the winner.

20:52 So yeah, that's that's what it felt like.

20:54 Um, one I forgot to mention one critical takeaway is uh at my final

21:00 hedge fund suddenly my boss uh we went from investing over a three-year horizon.

21:04 My boss comes into my office one day after

21:07 our first quarter of investing and we had a draw

21:10 down which shouldn't have mattered because you know we

21:12 had probably deployed maybe half the capital into our ideas.

21:15 we're waiting for our our entry points.

21:17 And he comes in after this draw down and he says,

21:20 "I know we're investing longer term,

21:22 but we just lost money in the first quarter.

21:25 We have to start looking for shorter

21:26 term opportunities to make money every month." Now,

21:29 me as the junior professional, I didn't ask him any clarifying questions.

21:33 Okay, are we going to do what everybody else quote seems like they're doing,

21:36 or are we going to stay within the legal or ethical guard rails?

21:39 I didn't ask that question.

21:40 I made assumptions.

21:41 Everything goes now.

21:43 We got to make money every month.

21:44 And so that pressure was pretty acute at that point uh in the business.

21:49 And when an employee crosses a line,

21:52 there's usually three reasons called the fraud triangle.

21:55 There's a perceived need to cross a line.

21:58 So uh we had this need for now short-term performance.

22:01 There's an opportunity to do it and then

22:02 there's a rationalization which we'll we'll talk about.

22:07 Yeah.

22:07 for for context context for Yeah.

22:09 for for context context for Yeah.

22:09 for for context context for listeners at this point you guys

22:10 were in like startup mode in a new a new hedge fund.

22:14 So you're trying to attract capital and and grow the fund

22:16 to make sure it's going to be a viable business

22:18 and your boss is saying this might not be a a vi

22:21 viable business if we don't you know pick things up.

22:25 That's right.

22:25 And we you know we were That's right.

22:26 And we you know we were

22:26 That's right.

22:26 And we you know we were seated by legendary investor Julian Robertson.

22:29 Uh people might be familiar with the Tiger Management one of the great

22:32 hedge funds of the 80s and 90s and kind of a pioneer.

22:35 And so in his in his later days when he's 75,

22:37 he's now seating uh hedge fun managers like us

22:41 and kind of a funny story in the book, you know,

22:43 everybody had these great suits and uh wore suits

22:45 to the office and we went every Tuesday to pitch

22:48 our ideas at lunch and you're surrounded by like

22:51 the most impressive people that I've ever seen in one room.

22:53 Uh you're pitching ideas and so my legitimate would have been

22:58 my career-making trade was to be long Google, short yellow pages.

23:02 uh younger listeners will not know what the yellow pages are,

23:04 but I'm sure we all remember uh these are these are the bricks

23:08 in our driveway that once you know a few years after the Google IPO,

23:11 you can see what's the point of having a yellow page and and at that time

23:14 in the world there was still $30 billion

23:16 of market cap and like five yellow page companies.

23:18 I think there was one Canadian yellow page company

23:20 and told my boss these are going to zero.

23:23 That's the only insight you need.

23:24 So I pitched that idea.

23:25 Somebody had already pitched it just a funny story.

23:27 And then I started pitching uh the Canadian darling, right?

23:30 Blackberry.

23:30 And then everybody ripped me apart.

23:32 Don't you know about the iPhone coming?

23:34 What?

23:34 So, but that was it was really I I liked the the competition uh you know

23:38 just pitching but you also was very competitive

23:41 like pressure you know very very high pressure job.

23:45 Yeah.

23:45 So you're in this super Yeah.

23:45 So you're in this super Yeah.

23:46 So you're in this super competitive environment.

23:46 What what role do you think your own ambition

23:49 played in your eventual ethical and legal lapses in judgment?

23:54 It was huge.

23:54 Um I would say it's pretty It was huge.

23:55 Um I would say it's pretty It was huge.

23:56 Um I would say it's pretty big.

23:57 uh people I didn't really even realize this until I started writing the book

24:01 like through my life it was all about I was so focused on the outcome

24:06 like okay um I applied to this Ivy League school I got deferred whatever

24:10 I you know whatever has to happen to get that outcome so I went

24:14 through you know inventing clubs in high school to say I'm the president

24:17 to put that on my college resume whatever it takes then I get to college

24:20 then you have to get the investment making internship and it's just like I

24:23 always felt like an outsider you know

24:25 Tom from Georgia at this Ivy League school, but I'm going to do what it takes.

24:28 I'm now work these people and really focused

24:30 on just like the next rung in my career.

24:33 Never stepping back and saying maybe I'm

24:34 actually pretty content now where I should be.

24:36 It was always like more more.

24:39 So that ambition, it didn't really dawn on me until I

24:42 finally got the whole first draft of the book down like wow,

24:44 this played a huge part in what would happen, you know, later in my career.

24:49 Let's talk about that first trade that you made with with Edge.

24:53 And I'm wondering what did it feel like to you once you completed it.

24:57 Was it was it fear?

25:00 Was it relief?

25:00 Or And I I think you described in the book a little

25:02 bit that you were a bit surprised that nothing really happened right away.

25:07 Right.

25:07 It's not like bells and whistles went off.

25:09 It took a little while for it to kind of

25:11 It took a little while for it to kind of

25:11 It took a little while for it to kind of settle.

25:13 Right.

25:13 So a few months after my boss Right.

25:14 So a few months after my boss Right.

25:15 So a few months after my boss made our goals very short term,

25:16 I got a call from another investor who

25:18 would work for a billionaire named Raj Raja Rodnham.

25:22 He'll be the most famous person later arrested and she said I had made

25:26 her a lot of money over the last few years on some great ideas,

25:28 my my Google Yellow page ideas.

25:30 Um she had something for me and I shouldn't tell anybody.

25:33 And so of course that should have set off a red flag.

25:37 I was curious.

25:37 She gave me a blatant tip on a public company that was going to be acquired,

25:41 you know, in a few weeks.

25:42 Here's the date.

25:42 Here's the price.

25:44 Here's the private equity firm.

25:45 I mentioned in the book um I didn't trade

25:49 on it initially because it sounded like illegal information,

25:51 but then I shared it with the guy Gotham who

25:54 had given me the first tip which I didn't trade on.

25:56 I said, you know, we're catching up, we're talking,

25:59 give it to him almost as a gift.

26:01 People will ask me, why did you tip him if there was nothing in return?

26:04 I I just, you know, he was losing money.

26:07 I gave it to him.

26:07 He tells his whole firm, uh,

26:10 and so the next day or so, the stocks start moving up.

26:13 Um, and then she's going to make millions, he's going to make millions,

26:17 and I'm going to just sit here and do nothing.

26:20 And, uh, when an employee crosses a line,

26:22 the second element, uh, there's the need to do it.

26:25 There's the opportunity.

26:25 So, at my company, I could buy a stock in our portfolio and not have

26:30 to talk to my boss as long as it was less than 1% of our AUM.

26:35 And I remember calculating and pulling up the order management system.

26:41 What is a.9% position?

26:42 Okay, it's 14,000 shares of the stock Kronos.

26:45 Putting the order in the order entry system,

26:48 buy 14,000 shares of Kronos limit order.

26:50 And then it was executed right there.

26:53 I committed securities fraud.

26:55 And how did it feel?

26:58 Um, I didn't know it was going to happen at the time.

27:00 I told myself, these are rumors.

27:01 I'll do it just this one time.

27:03 I'm still a good person.

27:03 the classic rationalizations.

27:05 And to your point though, it almost felt like nothing.

27:08 I put the trade in.

27:08 I went on to work on my next idea.

27:11 And uh it would actually come to fruition a few

27:14 weeks later in terms of exactly what she she told me.

27:18 But at that time, I hate to say I wasn't losing sleep.

27:20 I wasn't tossing and turning.

27:21 Oh my god, I just bought 14,000 shares.

27:23 I said, well, let's see if this happens.

27:25 You know, she could be full of it and on to the next uh you know,

27:29 whatever I had on my desk that day to work on.

27:32 you did talk to some people in your life as as kind of a sanity check.

27:35 So you you had some some feelings of guilt around it.

27:38 How did the people that you approached

27:40 to with this kind of story saying I I did this.

27:42 What do you think?

27:43 How did they respond?

27:45 Yeah, that's yeah that's a great point.

27:46 Yeah, that's yeah that's a great point.

27:46 Yeah, that's yeah that's a great point.

27:47 Um the next day or two I was catching up with two

27:49 friends who I just anonymized in the book but these were

27:51 good friends from college who were both starting their own hedge funds

27:54 that year and I did want to bounce it off of them.

27:57 I guess maybe I wasn't losing sleep but it was on my mind.

28:01 uh you know, let's see if this happens.

28:04 First tip I've traded.

28:05 And so I called these guys I thought highly of told them everything.

28:08 Um they both one of them said,

28:10 "I can't believe you know something like this." You know,

28:12 they were both in shock that I actually knew something like this.

28:15 Yet they both each bought shares.

28:17 And I remember one of them or both

28:19 of them said that they would also take a flyer.

28:21 Um taking a flyer is a euphemism that we

28:25 used to use for buying a small amount of stock, but it's also a euphemism.

28:29 So actually instead of calling it illegal insider trading,

28:33 you call it something else, taking a flyer.

28:36 And when you do that, and this is common in other types of fraud,

28:40 like the perpetrator feels less bad about the what

28:42 they're doing because they're calling it something else.

28:44 It creates psychological distance.

28:46 But once I had these guys in and I thought highly of these guys,

28:51 that was fuel like that that pure approval

28:54 or bringing these guys across the line with me,

28:57 that was the absolute fuel for this engine

29:00 of rationalization in my head to continue.

29:03 Just like when you get that that peer

29:05 group more than anything coming to your side, that can be a big uh you know,

29:09 a big push towards towards growing and and crossing the line.

29:14 And how did those friends respond when the trade actually worked out?

29:18 Because presumably there was some delay between when you

29:20 had the discussion and when the profit actually came in,

29:25 right?

29:25 So I think it was only at two or

29:26 right?

29:26 So I think it was only at two or

29:26 right?

29:26 So I think it was only at two or three

29:27 days after I called them that it was a Friday morning.

29:30 I remember it so vividly.

29:32 I'm at my desk uh before the the the stock

29:34 market opens about to meet with my partner

29:36 for our meeting and I see trading in Kronos has

29:38 halted word for word exactly what the woman told me.

29:42 I remember at first sort of having heart palpitations like oh my god this is

29:46 actually not a rumor it's happening and then went to talk to my boss

29:48 for the morning meeting and this would

29:51 happen three more times but all these four

29:54 trades he would say some combination of like don't tell me how you're doing

29:57 this or you know this is great but keep me out of it and then

30:02 those two friends I had missed calls from them afterwards came back to my desk

30:06 and you know they freaked out on me they said oh my god you

30:09 just threw like a grenade in our lap do you know what you did.

30:12 And it was weird because, you know,

30:14 I didn't put a gun to their head to make the trade.

30:16 So, they but they uh realized that, okay,

30:20 we're we could be in serious trouble here.

30:22 And so, it was a weird situation.

30:24 Like, they took the risk of placing the trade and then

30:26 called me and blasted me for giving them the information.

30:27 But again, I didn't, you know,

30:29 I didn't make them put the put the stock position

30:31 on, but they were definitely they were definitely scared at that point.

30:34 A lot more than I was up to that point.

30:37 Yeah.

30:37 Reading that part of the book was Yeah.

30:38 Reading that part of the book was Yeah.

30:38 Reading that part of the book was crazy.

30:39 It's like they It's like you handed them a grenade,

30:41 but they didn't really believe it was a grenade and then and then

30:45 the and then the trade actually happens and they're like, "Oh, shoot.

30:48 That was a That was a real grenade, huh?" Yeah.

30:51 My editor was confused about that.

30:52 Yeah.

30:52 My editor was confused about that.

30:52 Yeah.

30:52 My editor was confused about that.

30:52 She asked me about that exactly.

30:53 She's like, "Well, this doesn't make any sense." I'm like, "I know.

30:55 It was a weird it was a weird thing." Yeah.

30:59 Yeah.

30:59 What What a run what what did your

31:00 Yeah.

31:00 What What a run what what did your Yeah.

31:01 What What a run what what did your run of illegal trades what

31:03 what effect did they have on your personal life before you got caught?

31:07 because there's a whole other thing after you get caught,

31:09 but before you got caught, what effect did it have?

31:12 Yeah, it was really um you know there Yeah, it was really um you know there

31:14 Yeah, it was really um you know there was four trades

31:16 over 2007 that were illegal amongst the thousands of trades I wrote.

31:20 You know um my personal life was going great.

31:22 just got married, met a wonderful woman and um you know I was

31:27 able to compartmentalize the trades in terms of like you know I was

31:31 good going to church with her married a good Catholic and so I'm

31:33 doing all these good things in my life and so I was able

31:36 to kind of compartmentalized uh the term I use in the book is

31:38 called moral licensing where you can do some bad stuff but as long

31:41 as the way the good stuff you do outweighs by a lot than

31:44 the bad stuff it's very easy to feel like okay I'm okay with it.

31:47 So there wasn't a whole lot of strain um you know in my marriage or anything.

31:52 I didn't really think about it too much um before before it all fell apart.

31:58 Yeah.

31:59 Yeah.

31:59 So interesting.

31:59 The the moral Yeah.

31:59 So interesting.

31:59 The the moral Yeah.

32:00 So interesting.

32:00 The the moral licensing discussion of the book

32:01 is is uh is fascinating where you're like you

32:04 kind of know you're doing some bad stuff

32:05 but then you're doing this good stuff over here.

32:07 So you're like I'm I'm doing okay.

32:09 Yeah.

32:09 That's right.

32:09 That's right.

32:10 It's

32:10 Yeah.

32:10 That's right.

32:10 That's right.

32:10 It's Yeah.

32:10 That's right.

32:10 That's right.

32:10 It's it's common.

32:11 I mean as human beings human behavior moral licensing I I see it everywhere.

32:15 Yeah.

32:15 I see it everywhere.

32:15 Yeah.

32:15 I see it everywhere.

32:16 Yeah.

32:16 Yeah.

32:16 So interesting.

32:16 How did you get Yeah.

32:17 So interesting.

32:17 How did you get Yeah.

32:17 So interesting.

32:17 How did you get caught ultimately?

32:20 So it was uh four trades 2007 January So it was uh four trades 2007 January

32:24 So it was uh four trades 2007 January 2008.

32:25 The woman that had tipped me said she was going to be in New York.

32:27 She called me, wanted to have lunch in New York.

32:30 She's asking me all these specific questions.

32:32 Tom, you know those trades were illegal.

32:34 We did last year.

32:34 And of course, I'm saying yes, they're illegal.

32:37 So I assume she was wearing a wire on me

32:40 to build help uh the authorities build these ca this case.

32:42 But she said I was fine.

32:45 And it wasn't until July of 2008.

32:47 It's 6:30 in the morning.

32:48 Now we're in the middle of the financial crisis.

32:51 I'm leaving my apartment to drop off some dry

32:54 cleaning in Manhattan before getting a taxi to work.

32:56 I step on the sidewalk out of the dry cleaner and I hear my full name.

33:02 Are you Thomas Kobe Harden?

33:05 And the last time I heard my full name was

33:06 my mother back in Georgia about to whip my butt.

33:09 And it wasn't mom.

33:09 It was uh 6:30 in the morning.

33:12 Two FBI agents.

33:13 anybody's seen, you know, an American crime show,

33:15 it's exactly like that where they show the wallets, FBI, come sit down with us.

33:19 So, we went and sat down at a Wendy's uh in Manhattan next to the dry cleaner.

33:24 And he said, "Look, man, we know about your four trades.

33:26 We know that you were just down in Georgia

33:29 uh visiting your baby nephew for his baptism, and they knew my my nephew's name.

33:35 Uh my first thought was, "Oh my god,

33:38 uh my dad's going to kill me." You know, what's he going to say?

33:40 All he could talk about was my success.

33:41 All my parents could talk about was my success.

33:44 Like Tom from Georgia going to an Ivy League school, going to a hedge fund.

33:48 They don't know what a hedge fund is.

33:49 They just know I'm doing well.

33:50 My first thought was they're going to be disappointed.

33:52 Then I thought, "Holy crap, this might impact my career.

33:55 Uh, oh my god, Sue is going to leave me.

33:57 We just got married.

33:58 As I said, she's devout Catholic.

33:59 She will have uh she had no idea I was doing this.

34:02 She's going to leave." And then I thought, "Oh my god,

34:05 I might go to prison." So,

34:05 I just started making implicating statements to the FBI.

34:08 They slowed me down.

34:10 I'm not even sure what they knew.

34:12 I just started telling them everything and they said basically,

34:14 could I help them build some cases in the industry against bigger players?

34:18 I took their card and said,

34:20 "Should I talk to an attorney first?" And the FBI said,

34:23 "Uh, we'll let you know when you can do that.

34:26 You can only tell your wife, nobody else,

34:27 about this right now." So, that's how it happened.

34:30 M I know it's hard for you to kind of

34:33 I know it's hard for you to kind of

34:33 I know it's hard for you to kind

34:34 of imagine how things might have played out differently,

34:36 but do you think had you not been caught after those four trades,

34:41 would you have stopped on your own?

34:43 Great question.

34:44 And I'd love to tell you Great question.

34:44 And I'd love to tell you Great question.

34:45 And I'd love to tell you after the fourth one,

34:46 I told her, "Stop calling me with perfect information.

34:48 I've had a moral epiphany." But that's that's not true.

34:50 I'm not going to rewrite history.

34:52 And I didn't think about it at the time, but today in in retrospect,

34:56 I think the FBI did me a favor, honestly,

34:58 stopping me after the fourth trade cuz it wasn't going to stop.

35:02 It probably would have escalated.

35:04 So, personally, I mentioned I only made,

35:06 you know, $46,000 in terms of my my career,

35:08 throwing my career away for that, but it's uncomfortable for me to say,

35:12 but putting myself back in that mindset at that time,

35:14 I would I would have kept doing it had

35:16 they not stopped me and maybe even bigger trades.

35:18 uh you know so that's they wouldn't have given

35:21 me a chance to help them at that point

35:22 would been you know one of the main targets

35:24 of the investigation if it was if it had continued.

35:27 Yeah that's a that's a crazy Yeah that's a that's a crazy

35:28 Yeah that's a that's a crazy counterfactual to think about.

35:30 Yeah.

35:30 Yeah.

35:30 Yeah.

35:31 Uh so the FBI approaches you they give Uh so the FBI approaches you they give

35:32 Uh so the FBI approaches you they give you their card.

35:33 They say don't talk to a lawyer yet.

35:35 How did you ultimately decide to become an informant before the FBI?

35:40 So I immediately violated uh their terms

35:42 So I immediately violated uh their terms

35:42 So I immediately violated uh their terms of not to talk to anybody else.

35:43 I went to um St.

35:45 Patrick's in Cathedral in Manhattan for her confession.

35:48 And I remember having gallows humor.

35:49 It was a long line on a Tuesday afternoon.

35:51 I thought, "How many other hedge fund people are in this line?"

35:54 I went to the uh confession box and told the priest everything.

35:58 And he's like, "Man, basically your penance is to help the FBI." Now,

36:01 I should have talked to a lawyer, but didn't.

36:03 And then I had to tell Sue uh my wife.

36:06 And I waited till Friday after work.

36:08 That was a Tuesday morning.

36:10 I'm having panic attacks.

36:10 I'm having bed sweats.

36:11 She's texting me what's going on.

36:13 what I mean she's thinking all these crazy

36:15 thoughts what's happening with him and she

36:17 had been working at Lehman Brothers I mentioned which you know went to went

36:20 to zero around that time or later that year so she's going through all

36:24 this stress Friday after work I told

36:26 her everything this happened Tuesday morning and I

36:29 remember accepting responsibility yes I made

36:31 these four trades and she said can you

36:34 say that again and I said it again and she paused which what felt like

36:39 forever and she said you know you didn't do anything to hurt me if

36:42 they're giving giving you a chance to clean up the industry, you should do it.

36:45 85% of marriages, I found a stat researching this for the book,

36:49 like we'll end right there where a spouse picks up the felony

36:53 because usually the spouse is in the marriage for other reasons, right?

36:56 Future hedge fund manager, not future FBI informant.

36:59 It wasn't easy, but she accepted it as well as she could.

37:02 And I told her, I have to meet with the FBI on Monday for lunch.

37:05 Met with them Monday for lunch after that Friday.

37:08 And they had this small piece of metal

37:10 on the desk uh or the table where we were meeting.

37:13 And at the time we had Blackberries.

37:15 And so I said, "Is that an extra Blackberry battery?" And they

37:17 must have thought I was like the most naive target they've ever stopped.

37:20 They said, "No, this is a recording device.

37:22 This is an actual body wire.

37:25 I'm going to have to build relationships with people

37:27 in the industry." People who I didn't know that well,

37:31 like major like 48-year-old hedge fund managers.

37:34 I'm 29 years old.

37:36 And usually as an informant,

37:36 you would actually have to wear a wire on somebody you knew well,

37:40 somebody you tipped.

37:40 The issue was the woman who tipped me and the guy

37:44 Gotham I had tipped had already both worn a wire on me.

37:47 So great friends.

37:48 Um, and so I I took the wire and and and started giving the FBI names

37:53 and we started mapping out people that I would

37:55 meet uh face to face and have these conversations.

37:58 So, at that point, it's kind of when I accepted, you know,

38:02 this this task to uh and the way I thought about it was like,

38:05 okay, I guess I'm going to help them clean up the industry,

38:07 but I was also concerned about myself, right?

38:08 I'm not going to say it was just all patriotic like the FBI was telling me,

38:12 like my my future was also at stake if I didn't help them out.

38:14 So, there was a lot of that, you know,

38:16 pull to to help them for my my own, you know, selfish reasons.

38:21 Yeah.

38:21 that I mean you talked about like

38:23 the difficulty of coming to understand that people who

38:26 you had talked to were wearing a wire and that you know you had become at least

38:32 I don't maybe not necessarily friendly but at least

38:35 had a working relationship with basically betrayed you

38:38 now you're being in put in a position where you've got to go do the same thing.

38:42 So tell us a little bit about like how difficult was it to play that role?

38:47 You must have had some training from the FBI

38:50 or did they just throw you in to the deep end?

38:52 I mean, how how did you make that adjustment?

38:54 Yeah.

38:55 No, readers will see I was Yeah.

38:56 No, readers will see I was Yeah.

38:56 No, readers will see I was definitely not trained.

38:58 Um, I was thrown in into a situation.

39:00 My first situation was a big target in Silicon Valley

39:03 and my cover story at the time was it's 2008.

39:06 I'm an analyst.

39:06 I'm probably going to lose my job.

39:08 Um, I need to interview with other hedge

39:11 fund managers who might be able to hire me.

39:13 You know, decent cover story.

39:14 I said we get a meeting and then the FBI would say, you know,

39:17 try to get them to talk about

39:18 trades they made on inside with inside information.

39:21 But if you're literally at the target of the FBI

39:23 and you're meeting me for the first time, maybe the second time,

39:26 we sit down and I'd say, "Oh,

39:28 it's been a tough year." And I got to the punchline very quickly.

39:32 So, Mr.

39:33 Silicon Valley, I called the guy.

39:35 Uh, remember those trades you made a few years ago on inside information?

39:38 Like, what would you say if you were ever asked as to why you did that?

39:42 the target would immediately shut the meeting down or change the subject because

39:45 I was so direct and then the FBI uh would always be sitting there

39:50 at another table like a Starbucks because the FBI wanted to make sure I

39:55 wasn't sliding a target uh a piece of paper saying I'm wearing a wire, right?

39:59 You you can't do that.

39:59 And so they were there.

40:01 I'd give them the recording device.

40:03 They would listen to it later and they'd say, "Tom, you're doing a terrible job.

40:06 You're so clumsy with this." And of course I'm saying,

40:09 "Hey, it's my first time doing this." Right?

40:11 there was no training for this.

40:12 You know, maybe in ethics class, you know,

40:14 they should have this training in college,

40:15 but really um you know, there was no training.

40:17 I was just, you know, thrown into the fire.

40:19 I had to figure this out for myself,

40:20 how to actually do this sort of quote job for them.

40:26 So, you you eventually do actually get pretty good at at doing this and I mean,

40:32 you become one of the most productive informants, at least in this operation.

40:35 Can you talk a little bit about your process for getting people

40:39 to talk on once you kind of got in the flow of this?

40:43 So there was a sort of it usually took So there was a sort of it usually took

40:45 So there was a sort of it usually took about three meetings.

40:46 Um there's a chapter one of the shortest chapters is the three meeting dance.

40:50 So I usually had this initial meeting where it was a little bit clumsy.

40:54 Um then there was a second meeting you know some reason

40:56 to follow up where that might be on the phone call

40:59 and I I would introduce a little bit more of myself

41:01 in terms of the four trades I had in the previous year.

41:04 The issue was I wasn't continuing to receive inside tips.

41:07 So I couldn't really give them anything to kind of catch them in the crime,

41:10 which actually the FBI does with some cases where they

41:13 actually have you commit the crime to get the bad guy.

41:15 And so that was stopping,

41:17 but I had to convince them that, hey, I still have sources.

41:19 The market's bad.

41:20 When it comes back, I'll be helpful to you.

41:22 And by the third meeting, usually there was more trust built.

41:26 And then the target would say just enough to me, oh,

41:30 they have a contact inside this public company or they

41:33 have a friend at a law firm who gives them information.

41:36 They would say just enough as a hint where uh the FBI would

41:40 tell me to stop uh and we go on to the next one.

41:42 But as I actually wrote the book, there was this whole framework I developed

41:46 where it was around uh timing the silence.

41:48 So I would ask the question and say nothing and then

41:51 they would talk and I kind of reflect and talk like them.

41:55 like you mirror their language, their body language.

41:57 The hard part on the phone, if I had a target,

42:00 is you lose like half of that communication, which is actually body language,

42:04 which if you're on the phone,

42:06 obviously you can't read their eyes and if they're,

42:08 you know, sweating or whatever.

42:10 Um, and then you had to make it normal.

42:13 Oh, yeah.

42:13 Everybody's doing this.

42:14 I know it's kind of tough right now.

42:16 Uh, people other people are have have these sources of information.

42:18 So, you just make it seem like it's normal.

42:22 Then I would sort of cue again with more subtle statements on their sources

42:25 of information and then I would just sort of echo it back to them,

42:29 be very patient in extracting it over three meetings and it actually

42:34 started to work and then by the end I had recorded like 48

42:37 conversations and by the end you know it was much more um

42:40 effective using this type of of framework um that wasn't given to me.

42:44 I just figured it out on my own.

42:48 Now, just to give uh people some context,

42:50 tell us a little bit about Operation Perfect Hedge and how widespread it was.

42:56 It was the largest insider trading It was the largest insider trading

42:58 It was the largest insider trading crackdown in US history.

43:01 81 individuals were criminally charged.

43:04 Uh primarily hedge fund managers, some corporate insiders.

43:07 To be honest, the number could have been doubled that.

43:10 Um I'm surprised, you know, certain names didn't come out.

43:13 People in the book, actually, I mentioned Mr.

43:15 Greenwich um was never charged.

43:16 He was one of the worst actors.

43:19 But the the most uh famous case was Raj Raja Raten, the Sri Lankan billionaire.

43:25 And the FBI used an unprecedented level of sophistication,

43:30 actual wire taps on phone conversations.

43:32 People like me, 32 informants of the 81 were actually

43:36 uh 32 people charged were informants like me uh wearing wires.

43:41 Um, and so the whole thing just exposed like how

43:45 endemic insider trading was in the business at that time

43:47 and certain certain corners of the hedge fund world and the industry

43:51 went into complete panic mode once these arrests started happening,

43:54 you know, once they were exposed by the news and the name started coming out.

43:58 So nobody really knew who to trust anymore.

44:02 Do you know or or do you have a sense of the effect

44:06 that this operation had on the amount of edge available out there?

44:11 uh the immediate aftermath was a chilling effect.

44:12 Uh there was a stat I shared in the book as I was making

44:16 these trades in 2007 that 60% of public companies in the US that were

44:21 listed uh had these unexplained spikes before

44:24 60% of companies that were acquired had

44:27 unexplained spikes in their share prices around

44:29 the option activity before the news came out.

44:32 So over half.

44:32 So this was really uh you know pretty heavily happening then.

44:37 Those numbers dropped off to like 15 20% by 2012.

44:40 So a pretty pretty big drop off.

44:43 I'll also say hedge funds were crushing the stock market

44:46 uh like kind of 2000 to 2010 2011 2012 and then

44:52 really in the last 13 14 years since you know

44:54 the market has drastically outperformed the average hedge fund index.

44:56 So I don't know if it's all edge trading

44:59 but it there is a you know some some correlation.

45:02 I think that is super interesting because I'

45:05 that is super interesting because I'

45:05 that is super interesting because I' I've read

45:06 the explanation for that phenomenon that you just described

45:08 that the hedge funds have not performed very well

45:11 in recent history as being like an overallocation to them.

45:13 There's just too much capital for them to deploy as efficiently.

45:17 But that explanation is yeah that's

45:19 an interesting alternative that the the amount

45:20 of edge out there decreased because of or partially because of this operation.

45:26 Yeah 100%.

45:27 Yeah 100%.

45:27 Yeah 100%.

45:28 Now, how important do you think your own role was in this operation?

45:30 Like, do you got did you have a sense of, you know,

45:35 did you feel personally responsible for bringing down,

45:38 you know, certain players that maybe would not

45:42 have been brought to heal without your involvement?

45:46 Yeah.

45:46 The way I thought about it, you Yeah.

45:47 The way I thought about it, you Yeah.

45:47 The way I thought about it, you know, people always ask me,

45:49 well, was cooperation even the right thing to do?

45:52 And I I the way I thought about this was the FBI has given me

45:55 this open playing field to clean up

45:57 the the industry and now I'm definitely not a whistleblower.

45:59 Sometimes I'll speak at a conference and they'll be like whistleblower Tom Hart.

46:02 I'm like I have to correct, you know, this I'm not the whistleblower.

46:04 Wasn't on my own valition that I had some, you know,

46:07 moral crusade to bring down the hedge fund, you know, managers.

46:10 Like I was actually only doing this because I was caught.

46:13 But, you know, I I felt I was one of 32 cooperators.

46:18 Um, but then when I was finally sentenced years later,

46:21 of the 81 people, the FBI wrote a letter saying,

46:24 "No, 20 of these 81 were directly related

46:26 to my cooperation the 48 times I wore a wire,

46:28 much more than anybody else." And so I had a bigger hand than I expected,

46:33 uh, you know, once once all these names came out.

46:35 So I think my role was in a way, you know, uh,

46:41 it was important in the way each piece of the puzzle kind of fit together.

46:45 not not flashy but necessary to complete the picture.

46:49 Um and it really forced me I guess it held me accountable

46:52 and forced me to confront what I'd done rather than trying to minimize it.

46:58 So this all happens the story eventually breaks

47:00 people start getting arrested and whatever whatever happens

47:03 um once that information is known but initially

47:06 your identity is a pseudonym tip or X.

47:09 Nobody actually knows who you are.

47:11 They they just can see that you you were a very productive informant.

47:14 But then eventually your identity as Tipper X gets revealed to the public.

47:18 How did your life change once that happened?

47:21 Once people knew who you were and what your role was in the investigation.

47:26 Yeah, that was a pretty horrible day.

47:26 It Yeah, that was a pretty horrible day.

47:27 It Yeah, that was a pretty horrible day.

47:28 It was uh October 2009, the first time Tipper X was revealed.

47:30 The first 20 arrests happened and there's only

47:33 one name that wasn't released and Tipper X.

47:35 And I I figured out who it was and that was me.

47:37 And when is my name going to come out?

47:39 And eventually the FBI asked me to wear a wire on two

47:41 my two friends I mentioned in the book who I was kind of protecting.

47:44 You know in a way I'm doing this for the FBI hoping

47:46 they don't look at my two friends and they wanted them to.

47:49 And I said okay this is where I actually draw a line.

47:51 Um and then the FBI said your name's coming out tomorrow.

47:55 So January 2010 um my wife Sue had just gone back to work from maternity leave.

48:00 In the US we only get three months

48:02 for for for new new mothers from maternity leave.

48:04 She goes back uh on a Monday showing

48:07 pictures of the baby Molly to her colleagues, a great, you know, a happy day.

48:11 And on Wednesday, her name is on the front page of the Wall Street Journal.

48:14 I mean, her her husband's name is on the front page of the Wall Street Journal.

48:17 And so, Tipper X's Tom Harden has revealed um she had

48:21 held it together so so unbelievably well up to that point.

48:25 And then Wednesday after work, you know, my phone's ringing off the hook.

48:29 I had left my job uh before this happened.

48:31 So, I was a stay-at-home dad with a new baby at that point.

48:33 and she's back to work and she came home that day when

48:36 her husband's name on the is on the front page of the paper.

48:39 She grabs the baby out of my arms when she gets home,

48:43 walks into the corner and says,

48:44 "I can't believe you did this to us." And, you know,

48:48 as a man, as a husband, now as a father,

48:52 realizing my actions, how much they hurt,

48:55 you know, my wife and my new baby, that was the lowest I ever felt.

48:59 you know, lower than the FBI at the Wendy's

49:02 or anything else that happened through this.

49:04 Just like once she once I saw the impact

49:07 of my actions on her, I've never felt worse.

49:09 Like never felt lower.

49:13 Yeah.

49:13 Now, what part of the story do you Yeah.

49:15 Now, what part of the story do you Yeah.

49:15 Now, what part of the story do you think is

49:17 most important for and most helpful for other people to hear?

49:21 Because it's I mean, there's so much going on in the book.

49:24 It's it's confessional.

49:25 It's instructive.

49:25 It's there's a lot of different layers,

49:27 but what what's the most important message that you hope people take from it?

49:32 I think the most helpful part is just how

49:35 think the most helpful part is just how

49:35 think the most helpful part is just how ordinary it all was.

49:37 Um, it sounds like it might not be like I wasn't I

49:40 wasn't some cartoon cartoon villain going to the office twirling my mustache,

49:43 you know, what insider trade I'm going to make today.

49:47 And I was a normal person.

49:49 Worked hard, got into Ivy League, and I believed I was a good person.

49:53 So I think the biggest lesson is it can happen to literally anybody.

49:57 And the moment you read this and feel like something could never happen to you,

50:00 you're actually most more susceptible I think.

50:03 So it just becomes it's an overused term but a slippery

50:08 slope where small compromises just they just compound over time.

50:11 And I didn't wake up one day and jump

50:14 from being a good person to insider trader.

50:17 It was incremental over time.

50:18 And you know, the other thing is also we talked about moral licensing,

50:22 just the the compartmentalization.

50:24 That's a huge red flag.

50:26 When you can't talk openly about your decisions with people you trust,

50:30 when you're actively hiding parts of your life from your family,

50:33 that's a warning sign that something is seriously wrong.

50:38 You mentioned in the book that you when You mentioned in the book that you when

50:40 You mentioned in the book that you when you were

50:41 at Penn got an A in your business ethics class.

50:44 Can you talk about how ethics in the classroom

50:46 are different from ethics in the real world?

50:51 Yeah, one of my first talks, um, the FBI

50:52 Yeah, one of my first talks, um, the FBI Yeah, one of my first talks, um,

50:53 the FBI invited me to speak about my case and I just went

50:55 on this pilgrimage talking with no charge to to colleges in the in the New

50:59 York area in in the in the Northeast and I went back

51:01 to my old alma mada early in my speaking journey and spoke there and uh,

51:06 one of the questions that the MBAs asked me

51:08 said they was joking like what did you get uh,

51:10 what grade did you get in ethics class?

51:12 And I remember I got an A and everybody had a good laugh at my expense.

51:14 Uh but it was it's I said hey uh and it's the way it was still taught there.

51:19 The ethics that was taught in in college was very theoretical and philosophical

51:24 like deontology util utilitarianism uh virtue ethics

51:30 and there was nothing about like psychology.

51:33 So psychology is younger than philosophy.

51:35 Philosophy goes back thousands of years.

51:36 Psychology is a few hundred years old and it should be much more situational.

51:42 In the classroom, there's usually clear-cut

51:44 scenarios and the answers are obvious,

51:47 but in the most pressing situations in the workplace,

51:51 it's much more about you feel that you're under pressure

51:54 or that everybody is doing whatever it is or what you're doing.

51:59 My trades are just immaterial.

52:00 They're so small.

52:01 They're dimminimous.

52:03 They mean nothing or you know um other situations.

52:07 it's much more psychological in the workplace

52:09 or I'm I'm helping my two friends out.

52:11 So that getting that people to buy into my to my behavior

52:15 um was much more like how it actually happens.

52:20 And it doesn't the classroom doesn't prepare

52:22 you for the rationalizations in real life.

52:24 You're you're telling yourself like this is just a gray area.

52:27 It's small and there's a whole emotional dimension to it too.

52:31 there's the guilt, the fear, the stress that just compounds over time and you

52:35 don't you can't really replicate that in the classroom.

52:39 How much did mentorship play a role you know

52:43 in this part of you know your your life

52:45 and that were there examples that you were able to look

52:47 to that helped you to kind of turn things around?

52:52 um mentorship, you know, almost played no role for for my younger self,

52:55 you know, Tom in my 20s.

52:58 And I think that was a huge part of what I was missing.

53:02 So, I wrote, you know,

53:03 I don't know if I called him a mentor in the book, but Evan, my boss,

53:06 was the closest thing I had to as was a mentor and obviously not a great mentor,

53:10 being willfully blind to the trades I was making, the laws I was breaking.

53:15 and there wasn't anybody who really that I latched on to who who

53:18 who cared about my professional development and maybe the person was out there.

53:22 I just didn't reach out to them.

53:23 I'm sure there were people that that would have taken on that role for me.

53:28 So, um I think it's important today a lot

53:30 of companies I speak at have mentorship programs,

53:33 but it's not it's not the way it should be.

53:35 It's usually almost like a second boss where your mentor should almost be like

53:39 your third parent like looking out for you

53:41 professionally but also like personally like what's going

53:44 on in your life what are the best decisions you can make and I almost

53:47 feel like what could have stopped me

53:49 from making the first trade had I been talking

53:52 to a mentor maybe once a month just about my career what I'm doing and shared

53:57 you won't believe these other guys are

53:58 making millions I mean we saw this happening

54:00 and then the fateful day she calls me and I rationalized the trade like

54:04 the right mentor would have slapped me around

54:06 like why would you ever cross that line?

54:08 You're already doing so well.

54:09 You're already seated by this legendary hedge fund.

54:12 It would have been it was very easy

54:13 for me to override my own perception of myself.

54:15 I'm a good guy.

54:16 I could place this trade moral licensing.

54:19 Psychologically, it's much more difficult if you let down

54:23 a mentor because then you're letting that person down.

54:26 So, I think if I just didn't act in isolation and was

54:29 talking to somebody outside the firm about what I was seeing,

54:32 it might have shut down the whole thing.

54:34 You know, again, we can't run the counterfactual,

54:36 but really that would have been maybe a huge help for me,

54:39 like not not crossing the line, just having a mentor.

54:42 I think there's the the formal I think there's the the formal

54:43 I think there's the the formal mentorship,

54:44 like those type of relationships that that a company

54:46 might put in place or whatever.

54:48 But you do talk in the book about

54:50 how when you're when you're an investment banking analyst,

54:52 how the the people above you were were super comfortable kind

54:55 of fudging the the adjusted EBIDA numbers to make a deal look better.

54:58 And so little things like that where where people

55:01 that are more senior from you are acting in a way

55:03 that make gives you a little bit of license and makes

55:05 it seem okay to do these things and that from reading

55:08 the book it seems like that a bunch of little

55:09 interactions like that and observations like that kind of made

55:12 you think okay well this is okay this is okay

55:14 and the line just keeps getting pushed further and further.

55:16 So even without formal mentorship I think

55:18 people who are in more senior leadership roles

55:21 um the way that they act really will affect the people that look up to them.

55:28 Oh 100%.

55:28 Um, every company I speak at Oh 100%.

55:29 Um, every company I speak at Oh 100%.

55:30 Um, every company I speak at has a different definition of culture.

55:32 And for me, culture is not the tone at the top.

55:35 Culture is those behaviors that employees believe will be rewarded.

55:37 Like that's what it actually is.

55:39 To your point, what behavior are people seeing?

55:42 Like if you had told young Tom back in college,

55:44 you know, this is going to be you.

55:45 I'd say, no, that's never going to be me.

55:47 I'm a good person.

55:48 But once you're into your first 100 hour weeks in investment banking,

55:52 you forget whatever training you had in ethics in college.

55:55 you assimilate to the culture and what you see around you.

55:58 So maybe easier said than to me like looking back

56:00 if I had a mentor it would have changed it.

56:01 Who knows?

56:03 But you you can underestimate how much the culture can change

56:07 your decision-m when you're in the middle of it like that.

56:10 I'm not going to that investment banking, you know, adjust to ibeta.

56:13 I'm not going to push back.

56:13 I'm 22.

56:14 I'm just processing it and taking orders.

56:16 I'm not going to be courageous.

56:17 I'm just going to do because the other guys,

56:19 this is how it how it, you know, how it works.

56:23 Yeah.

56:23 Yeah.

56:23 Yeah.

56:23 So Thomas, I think you know our firm

56:25 is works with a largely passive investment strategy.

56:29 So we're not buying or choosing hedge funds.

56:32 Just wondering what your experience working

56:35 in the hedge fund environment has made

56:38 you think about them as an investment choice for the average retail investor.

56:45 For most retail investors, I think hedge funds are a pretty pretty bad deal.

56:48 I mean the fees alone are you know 2

56:51 and 20 is what it usually is 20% of profits 2%

56:55 management fee and if a hedge fund returns say 10%

56:57 a year after fees you're like at six or 7%.

57:00 Meanwhile, you know a lowcost index fund you're you're keeping all of it.

57:04 And most hedge funds as we were saying most

57:06 recently don't outperform the market over time and they're illquid.

57:09 So I think your best bet as a retail investor is just to stick

57:13 with uh you know advisors and um just skip the hedge funds entirely.

57:16 You have a diversified portfolio of lowcost index funds.

57:20 Rebalance periodically.

57:21 Focus on your savings rate and your time horizon, right?

57:23 It's it's boring, but it actually it actually works.

57:27 Wow.

57:27 Music to my ears.

57:28 We did not tell Wow.

57:29 Music to my ears.

57:29 We did not tell Wow.

57:29 Music to my ears.

57:29 We did not tell Tom to say that.

57:30 Tom Tom said that on his own.

57:32 That sounds like something that either one of us would have said, Tom.

57:35 Indeed, that was great.

57:35 I will say retail investors should be careful too that they

57:38 if they were to trade single stocks just to make sure because

57:41 the the SEC in the US the last decade or so there's been

57:45 a lot more retail investors charged

57:46 with insider trading than hedge funds because

57:49 uh corporate insight so say somebody's a

57:50 uh corporate insight so say somebody's a

57:50 uh corporate insight so say somebody's a retail investor that works at a public

57:52 company they find out something's going

57:53 to happen at their company and acquisition maybe they don't even maybe they

57:56 maybe they don't even maybe they

57:56 maybe they don't even maybe they accidentally tell a relative

57:58 who's a trader and they trade and they split the profit

58:00 like that's illegal insider trading and there was actually a guy

58:03 I knew who was an estate lawyer who's not a trader,

58:06 but he was working on an estate, placed to trade, got charged.

58:10 And so, you have to understand that insider trading could be anybody,

58:13 not just the hedge fun people.

58:14 It could be anybody in any walk of life getting information and trading it.

58:17 So, just a just a cautionary sort of flag too on that.

58:22 Yeah.

58:22 Interesting.

58:23 What message do you Yeah.

58:24 Interesting.

58:24 What message do you Yeah.

58:24 Interesting.

58:24 What message do you do you hope people take away

58:25 from your story with respect to acting ethically in their own lives?

58:30 I think the core message is that ethical

58:32 I think the core message is that ethical

58:32 I think the core message is that ethical failures are are incremental.

58:34 So they start with these small rationalizations and they compound over time.

58:38 You don't you don't wake up one day and decide to become a criminal.

58:43 You take these small steps each one feeling like a minor exception and before

58:47 you know it uh you know you're somewhere you never intended to be.

58:53 I think the the book and your story is I think the the book and your story is

58:55 I think the the book and your story is ultimately one about redemption.

58:58 So interested to hear like what what do you hope people who

59:01 have also experienced some kind of downfall take away from your story.

59:06 Oh, thank you for that.

59:07 And now that Oh, thank you for that.

59:08 And now that Oh, thank you for that.

59:09 And now that I've been speaking almost a decade, I'll speak at conferences.

59:11 People come up, they don't ask me about insider trading necessarily.

59:14 They they actually share with me their own personal

59:16 sometimes self-inflicted failures just oneonone in those little conversations.

59:20 And I always joke, you know, I'm not wearing a wire anymore.

59:23 You can talk to me.

59:24 But [laughter] uh really like people will share heavy things with me and what

59:29 you have to do I learned is you have to own it completely.

59:33 So before I started sharing my story there was some

59:36 hesitation about bringing me in to speak because the previous crop

59:39 of sort of WorldCom Enron some of those uh executives had

59:43 gone out to share their stories but they didn't really own it.

59:47 So you have to own it completely.

59:47 You you can't minimize what you did.

59:49 You can't blame other people.

59:51 You can't make excuses.

59:52 is, you know, I made bad choices under pressure, but those choices were mine.

59:55 Like cheating is a choice.

59:57 The complete ownership is the foundation of any meaningful redemption.

1:00:02 And you have to understand that the shame

1:00:04 and the fear that you're feeling right now

1:00:06 is actually proportional to the gap between who

1:00:09 you thought you were and what you actually did.

1:00:13 And the shame is I'm a terrible person.

1:00:15 The guilt is maybe I'm not a bad person

1:00:17 and got in a situation I shouldn't have gotten in.

1:00:19 So the shame is not helpful.

1:00:20 So lose the shame.

1:00:22 The hardest part for anybody listening going through

1:00:25 something maybe self-inflicted that you did that's difficult.

1:00:27 Maybe not even a federal crime,

1:00:28 just something happened in your life is you have to be able to forgive yourself.

1:00:33 And I continue to challenge myself on And I continue to challenge myself on

1:00:35 And I continue to challenge myself

1:00:36 on that because it's an ongoing process for me.

1:00:39 Occasionally, I'll admit I get some dark thoughts in my head,

1:00:41 but those are just thoughts.

1:00:43 Uh those are just passing through my head.

1:00:45 But again, um you have to be able to forgive yourself.

1:00:48 That's the hardest part for somebody trying to bounce

1:00:51 back and and go on with their life.

1:00:55 Yeah.

1:00:56 Incredible, man.

1:00:57 Such a such a I Yeah.

1:01:00 Incredible, man.

1:01:00 Such a such a I Yeah.

1:01:00 Incredible, man.

1:01:00 Such a such a I don't know, impressive.

1:01:01 I don't know what the word is,

1:01:03 but it's reading reading the story is like I was saying to Dan earlier,

1:01:06 you can't help but but see yourself in your shoes

1:01:08 as you're telling the story and and just the as as the mistakes were made

1:01:12 and as you were forced into these these difficult situations.

1:01:15 It's uh yeah, it's uh it's a it's interesting psychologically

1:01:19 to read the book uh and and have those feelings.

1:01:24 Uh the last Thank you for that.

1:01:25 Yeah.

1:01:25 Thank you for that.

1:01:25 Yeah.

1:01:25 Thank you for that.

1:01:26 Yeah.

1:01:26 Oh, yeah.

1:01:26 I mean, so so uh so Oh, yeah.

1:01:27 I mean, so so uh so Oh, yeah.

1:01:27 I mean, so so uh so insightful, I guess.

1:01:28 It's hard to find the right word to describe it.

1:01:30 It's just such a unique experience that you've gone through and uh yeah,

1:01:34 the fact that you've shared it is incredible.

1:01:37 So, you've you've been through I mean,

1:01:39 you had successes getting into an Ivy League school,

1:01:41 as you talked about earlier,

1:01:43 that you you didn't expect to get into and maybe felt you had no place in.

1:01:46 Um, then you got on a Wall Street.

1:01:48 You've had all these successes.

1:01:48 You've had this big downfall and then you've had now uh I would say further

1:01:53 successes uh sort of transitioning into being

1:01:56 a a speaker and now writing your book.

1:01:58 I'm really curious to know how how do you define success in your life?

1:02:04 It's really having, you know,

1:02:05 my set of what's important to me today in my 40s is much different than my 20s.

1:02:09 You know, I think going through this experience or not,

1:02:11 all of us as we get to our 40s

1:02:12 have different priorities than our our younger selves.

1:02:15 For me, it's really the quality.

1:02:17 I would say it's the quality of my relationships.

1:02:19 You know, am I a good husband to my wife

1:02:22 Sue who stayed with me through all this?

1:02:23 Every reader is going to see I'm not the hero of the book like she is.

1:02:26 We just got celebrated our 20th anniversary.

1:02:28 Uh can I look her in the eye and tell her the truth and not hide anything?

1:02:31 Am I just present with my family?

1:02:33 Now my daughters are teenagers.

1:02:35 It's a lot of fun and it's

1:02:37 about whether I'm contributing something meaningful like

1:02:39 when something comes up after a talk and you know uh somebody texts or emails

1:02:44 me I'll never forget this because this own

1:02:46 rationalization was in my head that feels

1:02:49 like success in a way that my old bonuses you know never never did.

1:02:54 And there's also this component of, you know,

1:02:57 accepting my limitations and being at peace with them.

1:02:59 Like I'm never going to go back and manage a hedge fund.

1:03:01 I'm probably not going to be a billionaire,

1:03:03 but my Google search results are always going to include insider trading.

1:03:06 But those are while those are permanent constraints.

1:03:09 I can work within them.

1:03:10 And you know, really, I I so much enjoy just what I'm doing

1:03:16 today and being honest about it and accepting responsibility.

1:03:20 And success for me is being able to tell the complete truth about who you are

1:03:23 and what you've done and still feel like

1:03:27 you're becoming the person you actually want to be.

1:03:30 That's a great answer, Tom.

1:03:31 This is a That's a great answer, Tom.

1:03:32 This is a That's a great answer, Tom.

1:03:32 This is a been a fantastic conversation.

1:03:33 We really appreciate you coming on the podcast.

1:03:36 Thanks for so much for having me on.

1:03:37 Thanks for so much for having me on.

1:03:37 Thanks for so much for having me on.

1:03:41 It's a pleasure.

1:03:42 Hey everyone, it's producer Matt.

1:03:44 Thank you so much for tuning in to this week's episode.

1:03:47 Before we sign off, here's the disclaimer you've been waiting for.

1:03:51 Portfolio management and brokerage services in Canada

1:03:53 are offered exclusively by PWL Capital,

1:03:56 which is regulated by the Canadian Investment Regulatory Organization

1:03:59 and is a member of the Canadian Investor Protection Fund.

1:04:03 Investment advisory services in the United States of America

1:04:06 are offered exclusively by One Digital Investment Advisors LLC.

1:04:10 One Digital and PWL Capital are affiliated entities

1:04:14 and they mostly get on really well with each other.

1:04:17 However, each company has financial responsibility

1:04:20 for only its own products and services.

1:04:22 Nothing herein constitutes an offer or solicitation to buy or sell any security.

1:04:28 Occasionally, we tell you not to buy crappy investments in the first place,

1:04:32 but that's not the same thing as telling you to sell them.

1:04:35 This communication is distributed forformational purposes only.

1:04:38 The information contained herein has been derived from sources

1:04:42 believed to be truthy but not necessarily accurate.

1:04:46 We really do try but we can't make any guarantees.

1:04:50 Even if nothing we say is fundamentally wrong, it might not be the whole story.

1:04:55 Furthermore, nothing herein should be construed as investment,

1:04:58 tax, or legal advice.

1:05:00 Even though we call the podcast your weekly

1:05:03 reality check on sensible investing and financial decision-making,

1:05:06 you shouldn't rely on us when making actual decisions, only hypothetical ones.

1:05:11 Different types of investments and investment strategies have varying

1:05:14 degrees of risk and are not suitable for all investors.

1:05:17 You should consult with a professional adviser to see how

1:05:21 the information contained herein may apply to your individual circumstances.

1:05:24 It might not apply to all.

1:05:26 Honestly, you can probably ignore most of it.

1:05:29 All market indices discussed are unmanaged,

1:05:32 do not incur management fees, and cannot be invested in directly,

1:05:36 which is a shame because it would be awesome if you could.

1:05:39 All investing involves risk of loss, including loss of money,

1:05:43 loss of sleep, loss of hair, and loss of reputation.

1:05:48 Nothing herein should be construed as a guarantee

1:05:50 of any specific outcome or profit.

1:05:53 Past performance is not indicative of or a guarantee of future results.

1:05:57 If it were, it would be much easier to be a Leafs fan.

1:06:01 All statements and opinions presented herein are those of the individual hosts

1:06:05 and or guests and are current only

1:06:08 as of this communication's original publication date.

1:06:11 No one should be surprised if they have all since recanted.

1:06:14 Neither one digital nor PWL Capital has any obligation to provide

1:06:19 revised statements and/or opinions in the event of change circumstances.

1:06:24 See you next time.

1:06:28 [music]