b'Dawdy Speaker SeriesOn April 14, the School of Accountancy hosted Tipper Xnity in a full Bush Auditorium. Throughout his talk, he an insider trading informant for the FBI in 2008 anddiscussed the ethics lessons he learned after being caught for 2009as part of its Dawdy Speaker Series.insider trading. The man known as Tipper X, Tom Hardin, told his story clearly and compellingly to members of the Trulaske commu-Insights (from Gryphon Strategies) The Inside Story of Tipper X On April 14, as part of the Dawdy Speaker Series at theand I was under pressure to make money every month. Its University of Missouri, special guest Tom Hardin was invitedalso implied, if not, that my firm would find the next person to share his story with students at the universitys Trulasketo hire. The pressure to make that performance every month College of Business. Jay Dawdy, president and CEO ofwas just enough to rationalize it. Gryphon Strategies, sponsored the annual event that givesHardin discussed the psychological traps which pulled accounting students at his alma mater a chance to hear storieshim into a spiral of rationalization. You feel like youre not from the trenches of the accounting and investigations world.hurting anybody. The victim is the company whose informa-At 28, Hardin was a junior partner at an up-and-comingtion is stolen, but its not really like a human. Its definitely hedge fund. He was on track to achieve his dream career, butunfair and its always going to be a crime of rationalization. before long, felt like he was falling behind in an increasinglyHe said he tries to create awareness about this now but, again, competitive industry. Then, a moment arose when he madeits a slippery slope. Its often a junior account executive at a a decision to cross a very important line and the rest is history.publicly traded company who learns their companys going Hardin was later charged with felony securities fraud and,to be acquired. They call theiruncle, whos in the market. known as Tipper X, became the FBIs most productiveIts something thats just in the moment and it becomes an cooperating witness in Operation Perfect Hedge, a sting setupeasy case for the SEC to bring. by the federal government in 2007-2012 targeting the hedgeInsider trading is the oldest economic crime there is, said fund industry. The sting branched out into the largest insiderHardin. It goes back to 1792 when Alexander Hamiltons trading investigation in 25 years, leading to over 80 guiltyAssistant Treasury Secretary, William Duer, was using leverage pleas or convictions.to speculate on the first debt issued by the country. When Hardin shared his journey down the slippery slope intonews broke, Duer was actually chased through the streets of criminal activity and the impact it had on friends and family.lower Manhattan and almost disemboweled, so I got off He was asked how that started and what, if anything, maypretty easy. have helped him avoid temptation. Not making decisionsIt starts with the smallest, seemingly harmless decisions, Hardins story covered the four illegal trades he made in 2007longer able to utilize his degree in finance from the Whartonin isolation, he said. Thats the point where it starts. I referbut crossing the line between questionable and illegal is both as an analyst at a tech stock-focused hedge fund, resulting inSchool of the University of Pennsylvania, or even have ato it as isolated decision making. If you find yourself in thatdeceptively easy and incredibly costly. In all, I made four tip $1.2 million in profit for his firm. In 2008, he was approachedchecking account because hes on an anti-money launderingplace, you need to get outside your head and talk to someone.and trades but not for $46 million, or $4.6 million, but for a by the FBI to wear a wire and record phone calls to allowwatch list.Hardin said there was pressure and temptation. There wastotal of $46,000. For that amount of money, I had thrown them to identify other hedge fund managers and analystsFollowing the presentation, attendees took about a halfalways a group that had a certain status at conferences hedaway my career at age 29. involved in insider trading. He agreed to do so. Hardin himselfhour to ask questions about Hardins experience and theattend. To him, that group was the inside crowd. I neededGryphon would like to extend a special thanks to Vairam pled guilty in 2009.importance of ethical behavior.and I wanted to be liked by everybody and I wanted to fit intoArunachalam, Director of the School of Accountancy at the In addition to identifying why people make unethicalThe Dawdy Speaker Series is focused on fraud examina- that group. So when I got the inside information, its like theUniversity of Missouri and Joseph A. Silvoso Distinguished decisionsand how attendees can prevent making unethicaltion, forensic investigations, and regulation, and is supportedtest answers fall into your lap. What are you going to do? IProfessor, for his diligent organization and support of this decisionsHardin spoke candidly about the impact of aby Jay Dawdy, BS Acc 89, the president and CEO of Gryphonmade the wrong decision.event. felony conviction on his life and livelihood, saying, I lostStrategies in New York.Regarding his fateful decision, Dawdy asked, Was itJay Dawdy, CFE, CMA my past and my future. He noted to attendees that he is noperformance based in any way? Absolutely, said Hardin. My firms goals became very short-term after a rough start, 30 School of Accountancy2023 Newsmagazine 31'