The Rise and Fall of Tipper X: What we can learn about business crime from very personal pain

What is it like to commit a crime in business and then deal with the consequences?  For an inside perspective, Compliance & Ethics (“C&E”) professionals can learn this in very personal terms by reading Wired on Wall Street: The Rise and Fall of Tipper X, One of the FBI’s Most Prolific Informants, by Tom Hardin.  I personally had my first encounter with this story by hearing Tom speak at the 2025 Compliance Week national conference in DC. Tom was drawn into a headline-grabbing insider trading ring, and then “recruited” to wear a wire for the FBI.  Through this he had to deal with the pain of seeing the impact on those he loved. 

“It was never about the money.” Why do people break the law?  What causes corporate and organizational crime and misconduct?  Some people say greed.  Some dismiss this as just the result of “bad apples.” But given the broad range of possible wrongdoing and possible motivations, there is never likely to be one answer.  That means for us in the C&E field there is no magic solution. 

One way to look at this question is through the eyes of someone who has crossed the line.  Tom Hardin gives us a very memorable, personalized case study to consider.  Tom was drawn into insider trading and subsequently became a high-profile informant for the FBI. This book provides a compelling, very personal story that offers valuable insights into how violations occur.   

His observations on page 251 are particularly revealing.  He explains that “it was never about the money. It was about the need to belong.”    He was “the middle-class kid from Georgia, walking into Wharton surrounded by polished classmates who spoke the language of legacy and leverage like it was native.” As he puts it, “I wanted in.” 

This is such an important reminder for us in the C&E field, that the group aspect of behavior is key.  There is an enormously powerful force in group conduct. Conforming, going along, being part of the “team” is a constant draw in organizations. Understanding this factor can help us better understand why people do things.  It is an essential lesson for those in C&E – the danger of just going along as part of a group.

 For C&E professionals it is very comforting to have commentators tell us that we should not be about “compliance” or “policing.”  There is truth in this, that we need to work cooperatively with the people in a company and see where we can help the business.  But we always need to be able to step apart from the company and from the group.  We cannot just be “part of the team,” or simply “business enablers.”  We also need to be able to step outside of group think and ask the tough questions.  Yes, we want to help the organization, and most days we can do that and also keep our pledge to our profession.  But we also need to remind ourselves constantly that we are not just “part of the team,” that our commitment to the company is not our only commitment.  We also need to be committed to the protection of those who can be injured by corporate misconduct (which, as Tom’s story makes clear, can even include the wrongdoer). 

The dog that didn’t bark. The book is also striking as a “dog that didn’t bark” story. In the entire book there is only one reference to a compliance officer or compliance program – compliance steps that became legally required and implemented after the violations had started.  Nowhere in the story did compliance seem to play any role in any company.  Even in an industry where compliance program elements are generally mandated, where was this operating? Does it tell us something, that we were not a factor, not even a reference?  For the protagonist it may have been that his initial companies were not subject to any such mandate.  In the one case where a compliance officer is mentioned we learned that the title was given to the CFO.  Is that a wise choice in this industry? 

The absence of compliance as a factor calls to mind the need for the types of reforms that Compliance and Ethics: Ideas & Answers has been pushing for since its first editions. There should be a day when the SEC steps out of its narrow, unrealistic scope, and reconsiders what works in C&E and how to bring that about in the industries it regulates.  Today this agency takes the bureaucrat’s approach:  make some check-box compliance elements mandatory, and if they don’t work then just do more of what didn’t work. 

Of course, there is no C&E program that can work every time.  But the current approach certainly could use vast improvements and a reconsideration of bureaucratic mandates that do not fit the need.

Keeping secrets. There is another helpful aspect to Tom’s story.  This relates to keeping secrets, or more accurately the impossibility of keeping secrets. In the beginning one person told him a secret (which she probably had promised to actually keep secret).  He of course kept it a secret, except for telling another person. I have often joked that when people say they will keep something secret, what they mean is they will only tell one other person – at a time.  Or as Ben Frankin said in Poor Richards Almanac, “Three May Keep a Secret if Two are Dead.”

Once you act on “secret” information you start to leave a trail. With AI it is even more likely that companies and governments can detect statistical anomalies that highlight the existence of human manipulation and misconduct.   So a key message from any reformed wrongdoer is that depending on “secrets” is a losing game. If you think your secret is safe you are just wrong.  Yet the impulse to share, to brag, to “hint” at something secret is very strong. 

Scared straight.  Way back in time in the field of crime prevention there was a concept of “scared straight.”  The idea was to take young people into prisons as a deterrent and have them see where crime could lead them.  This was controversial, and there was at least some concern that young people might learn the opposite lesson and idolize the wrongdoing “bandit.”[1]   I would not think anyone listening to Tom will want to follow in his footsteps.  Still, it might be fascinating to study the impact of his experience on others.

My colleague and long-term friend, Jeff Kaplan, previously had taught at NYU, and in the 1980s brought in a former white-collar criminal to have students hear the story of what this experience was like.  Does this work?  Is it worth doing in companies?  Is there a danger that a sociopath in the audience might be inspired to do the same thing, but learn from Tom’s experience to be more careful? I tend to think the effect will be positive, and I firmly believe stories are a powerful way to communicate.  If I were still inhouse I would definitely consider having Tom tell his story so that others could learn from it and beware of the drivers of crime and the rationalizations that may lead to misconduct. 

Whatever your role in C&E, whatever risks you address, I definitely recommend reading this book and remembering its message. 

[1] Effects of Awareness Programs on Juvenile Delinquency: A Three-Level Meta-Analysis https://journals.sagepub.com/doi/full/10.1177/0306624X20909239?mi=ehikzz