Cooperation in Galleon, SAC Probes Spares Hardin Prison Term

Feb 26 2015 | 2:31pm ET

Former hedge fund analyst Thomas Hardin has avoided a prison term for his role in a massive insider-trading case in recognition of what is being described as “extraordinary” cooperation with authorities.  

Hardin, who was referred to as “Tipper X” in court documents before he was publicly identified, was an analyst for Lanexa Global Management when approached by the FBI with evidence he had engaged in insider trading and passed tips to others.

Hardin, who quickly acknowledged his wrongdoing, pled guilty in 2009 to conspiracy and securities fraud charges. He began helping the FBI shortly after being confronted with the evidence, court papers show.

Hardin ultimately provided information that led prosecutors to several insider-trading rings involving Galleon, Schottenfeld Group, SAC Capital and expert network Primary Group, among others.

Hardin’s cooperation and dozens of recorded phone calls and meetings enabled prosecutors to identify both sources and recipients of the inside information as well as develop a clear picture of the complicated web of contacts that made up the various rings.

A number of other government witnesses, most of whom pled guilty and agreed to cooperate in return for reduced sentences, were also cultivated using Hardin’s information. Ultimately, his involvement was instrumental in 20 convictions related to the expert network insider-trading ring alone, noted prosecutor Parvin Moyne in court filings.

To date, more than two dozen convictions or guilty pleas have resulted from the probes, including billionaire Galleon Group hedge fund founder Raj Rajaratnam. 

Hardin was ordered for forfeit more than $46,000, but will avoid prison in recognition of his cooperation, said U.S. District Court Judge Laura Taylor Swain.

As part of his 2009 guilty plea, Hardin remains barred from the securities industry.


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