Show And Tell: Carnegie Mellon Brought In An Insider Trader To Scare The Bejeesus Out Of Students

D.A.R.E bear

Photo: flickr: Aberdeen Proving Ground

Imagine you’re an excited and optimistic Business School student, trying to figure out how you’re going to spend the rest of your life.Then one day you walk into class, and BOOM! You’re sitting through a lecture about how you too could end up working for your dream firm, making a ton of money, and then going to jail.

That’s what happened to students at Carnegie Mellon’s Tepper School of Business this week when Garrett Bauer, a former proprietary trader, addressed their class. The Tartan, Carnegie Mellon’s school paper, wrote about it here.

Bauer plead guilty to insider trading in December of last year. He made $37 million from tips he got from two friends, but got caught. Now he’s out of jail on $4 million bail, but he’ll be headed back to a minimum security prison to serve his sentence soon (from the Tartan):

“I really want to prevent you from committing my crime, insider trading, or really any crime in general,” Bauer said in the short prepared speech that began the conference. “There are catastrophic consequences which nobody believes is going to happen to them.”

And the kids were definitely most interested in hearing about those consequences. Bauer told horror stories about being in jail and using a spork (awful) and getting a phone card that didn’t work (the kids had to be scared at that point).

“His personal anecdotes were amazing. Some of it was so emotional for me,” said Jennifer Cai, a first year. “I could really imagine being in jail…. I liked how he shared so much of his personal experience. He could have talked a lot more about investment and trading, but instead he talked a lot about how he felt.”

That right kids, and that’s how you could feel if you get caught insider trading. It’s a real thing.

“You hear about [insider trading] a lot. It’s a very present problem in this country,” said Roshan Sriram, another first year student. “I didn’t know that the consequences were that severe. His future is basically ruined.”

This is definitely one of those, “the more you know” moments.

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