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Several years ago, he was the mystery man in Wall Street's clubby hedge fund community: Tipper X, a confidential informant working for the Federal Bureau of Investigation, who wore a wire and made dozens of taped calls to help the government build a major insider trading case.
On Wednesday, the informant, Thomas Hardin, 37 years old, is scheduled to be sentenced before Judge Laura T Swain of Federal District Court in Manhattan for his role in the insider trading case involving Raj Rajaratnam and his now-defunct hedge fund, the Galleon Group.
Hardin, a former managing director at the hedge fund Lanexa Management in New York, pleaded guilty to conspiracy and securities fraud in late 2009. He was charged with trading in the securities of a raft of companies before public announcements of their acquisitions. The companies included Kronos, a Massachusetts software company; the 3Com Corporation, a digital electronics manufacturer; and Hilton Worldwide. In the case of Hilton, Hardin bet in July 2007 on the hotelier's imminent takeover by the private equity firm the Blackstone Group.
Hardin received some of his tips from Roomy Khan, the same woman who gave Rajaratnam corporate intelligence for a number of his successful trades. Both Hardin and Rajaratnam, for instance, were tipped off by Khan about the Hilton takeover. In some instances, Hilton among them, Hardin also paid cash to Khan for the nonpublic corporate intelligence he received, according to the government. Khan passed on the cash to her source, an analyst at the credit rating agency Moody's.
In addition, the government said, Hardin placed trades in securities of Google, based on inside information, before the search engine company's earnings for the second quarter of 2007 were publicly disclosed.
Hardin is one of the last defendants from the original Galleon insider trading investigation to be sentenced.
As a result of Hardin's trading, his hedge fund, Lanexa, made a profit or avoided losses of about $1.7 million, according to a sentencing memorandum submitted on his behalf by his lawyer. Lanexa was one of a collection of hedge funds known as Tiger Cubs that were seeded by one of the wealthiest and earliest hedge fund managers, Julian Robertson, who ran Tiger Management until 2000, when he closed it after losses in the Asian financial crisis and the dot-com bust. Lanexa settled its case with the Securities and Exchange Commission in March 2012, agreeing to pay $746,797 in ill-gotten gains and interest. The benefit that Hardin received for his unlawful trading through compensation from the firm was $52,000, the court document states.
Hardin did not respond to a message left at his home.
As soon as the FBI approached Hardin on the morning of July 9, 2008, he started cooperating, making consensual recording phone calls at the behest of the government, according to his lawyer's sentencing memo. "Significantly, Hardin - at his own great peril - also wore a concealed recording device with colleagues and even friends in order to gather information, sometimes flying across the country to do so," his lawyer wrote. His cooperation assisted in the convictions of dozens of insider trading defendants, his lawyer added.
The government has not yet released its letter to the judge on sentencing. Under the sentencing guidelines, Hardin could receive 37 to 46 months in prison. The statutory maximum is 25 years.
Letters that defence lawyers write before a client's sentencing typically showcase a defendant's good deeds in the hope that a sentencing judge will be swayed to deliver a lighter punishment. The letter, written by Hardin's lawyer, Larry H Krantz, is more powerful than most, and offers insights into Hardin and his family's history.
His grandfather was a Japanese prisoner of war in the Asian theatre during World War II and survived the Bataan Death March, the gruelling walk by tens of thousands of American and Filipino soldiers through the jungles of the Philippines in 1942. Thousands died in the scorching temperatures. Those who survived, like Mr. Hardin's grandfather, had to contend with the terrible conditions in a Japanese prisoner of war camp.
Mr. Hardin, because of his legal woes, has been a stay-at-home father since 2009, according to Mr. Krantz's sentencing memo. "Tom is usually the only father in the group of moms and grandparents," his wife, Susan, wrote in a letter to Judge Swain. Besides ferrying his daughters to dance and music classes and play groups, Mr. Hardin has taken up running marathons to help deal with the depression that has been part of his life since he was approached by the F.B.I., the sentencing memo said.
Mr. Hardin walked with his grandfather in the Bataan Memorial Death March, a commemorative marathon held at the White Sands Missile Range, an Army base in southern New Mexico. He ran his first marathon at the march memorial in 2013, choosing to honour his grandfather, who by then was 96 but was still fit enough to walk eight miles, according to Mr. Hardin's sentencing memo.
Whether he accompanies his grandfather to New Mexico for this year's commemorative marathon in March will depend on Judge Swain. Mr. Krantz is seeking a sentence without prison time for his client, as most other cooperators in the Galleon case have received, and no fine for his client.
Mr. Hardin comes from a close-knit middle class family that made good, his lawyer wrote.
He was born in Orlando, Fla., but grew up in Georgia, where his father worked for Coca-Cola in Atlanta and his mother ran a child-care service out of the family's home for several years.
An exemplary student, he was accepted by the University of Pennsylvania's Wharton School in 1995. A scholarship from the Air Force Reserve Officers Training Corps financed about 80 percent of his tuition, his lawyer wrote.
Since pleading guilty nearly six years ago, Mr. Hardin has shed his air of mystery and emerged as a visible volunteer for a variety of causes in his community in Westwood, N.J.
After his father-in-law, who battled leukemia, died in 2010, Mr. Hardin organized a local friends and family team to walk in the Leukemia and Lymphoma Society Light the Night walk. He also played a pivotal role in turning the basement of his local Catholic church into a free clothing store for needy families, according to a New Jersey community newspaper, which named him volunteer of the month in July 2013.
Mr. Hardin, who was photographed for the article with his two daughters, was quoted as saying, "I always wanted to do volunteer work but never had the time to do it."
The article simply stated that after losing his job in finance and moving out of Manhattan five years ago, his priorities had changed.
Anita Raghavan is the author of "The Billionaire's Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund."
©2015 The New York Times News Service
