The following article is the text that I use for the Great Business Stories podcast on this topic. To listen to the podcast, click on this link or alternatively listen to Great Business Stories on Spotify or Apple Podcasts.
What if I told you that one of the biggest insider trading scandals in Wall Street in the 1980s wasn’t orchestrated by a hedge fund titan or a corrupt CEO, but by a charming underpaid journalist for the Wall Street Journal who ruined his ruined his promising career and sullied the reputation of the great Wasll Street Journal- and all for just a few thousand dollars. This is the story of R. Foster Winans who was a rising star journalist in the heyday of the 1980’s, the era of “Greed is good.” This is not just a story of financial crime; it’s a cautionary tale where you might find yourself wondering: would I have done the same? It’s a cracking story, enjoy.
Early Ambitions and Ethical Warnings
Born in 1948 in Philadelphia, Robert Foster Winans didn’t set out to become a financial journalist. He was a former pre-med student who spent the 1970s bouncing between local newsrooms in Pennsylvania, New Jersey, Texas, and Washington state, building a reputation for lively writing.
By 1981, Winans grabbed an opportunity with Dow Jones News Service. Though he confessed, "I didn't know the difference between a stock and a bond," he joined as a low-paid copyreader. Winan’s gained a reputation for being witty and charming, but more crucially he had a knack for pattern recognition—spotting movements in stocks that seemed to have no clear explanation. It was this ability to piece together seemingly unrelated bits of information that caught the attention of his editors and, in 1982, earned him a spot at The Wall Street Journal’s prestigious Heard on the Street column.
The Gravity of 'Heard on the Street'
The "Heard" column might have been tucked near the back of the Journal, but it had a lot of power. Stocks mentioned favorably rose about 6% on average, while those criticized fell just as much. Inside the Journal, writing "Heard" was treated as a big responsibility. On his first day, bureau chief Stewart Pinkerton made it clear: Winans was told in no uncertain terms that leaking or trading on column information would be grounds for immediate dismissal. The policy, although not actually written down, was blunt: "Such material must never be disclosed to anyone outside the company, including friends and relatives."
The journalists had to be careful and subtle- even calling companies for comment could inadvertently move markets. Sources often tried to coax advance tips, and stocks sometimes began shifting before a column even hit the page. As Dan Dorfman, a "Heard" veteran, observed bluntly, "There are always going to be leaks. There is no way to prevent them."
Winans approached his work like an investigator —he read between the lines. A tense CFO on an earnings call? That was a story angle. He cultivated sources among analysts and executives, pressing them for the smallest insights that might move a stock. His instincts were sharp, and his work made an impact.
Private Frustrations and Early Slips
In public, Foster Winans was a rising star. In private, he was struggling. At 35, despite his influential byline, he earned around $30,000 a year. Manhattan was expensive, and he lived on a "slummy block" of 14th Street. He complained often about being underpaid.
Personal stresses weighed even heavier. His longtime partner, David Carpenter was battling a large debt from leukemia treatment.
The Wall Street Journal culture compounded these frustrations. Recognition was rare; in short, Winan’s wanted more validation and more money. As part of his job, he met daily with rich brokers and financiers at exclusive restaurants and riding in limousines, he felt the disparity between his talents and earnings when compared to their talents and earnings.
The early to mid 1980s was a bull market, a time of soaring stock prices, deregulation, and big money. This period was probably best encapsulated in Oliver Stone’s Wall Street where Michael Douglas uttered the infamous line Greed is Good- and interestingly that line was actually credited in real life to Ivan Boesky, one of the most successful arbitrage traders at the time who would eventually get caught up in a huge insider trading scandal in 1986. The actual; quote which he said in a commencement speech at Berkeley business school in 1986 is: “I think greed is healthy. You can be greedy and still feel good about yourself.”
So it was this atmosphere where Winans could see that all these people profiting off the market, while he was being paid peanuts, didn’t feel that was getting any real praise or recognition from his bosses, and at the same time had all of this insider knowledge. It didn't take long before he gave in to temptation.
In January 1983, he secretly purchased 400 shares of American Surgery Centers stock under Carpenter’s name, days before a favorable "Heard" column ran. Their $1,814 investment netted a $4,674 profit. Emboldened, they tried again making another $500. To avoid detection, Winans phoned in trades pretending to be Carpenter.
The operation was crude, small-scale, and unnoticed.
The Meeting That Changed Everything
The real turning point came with a seemingly innocent introduction. In early 1983, while researching American Surgery Centers, Winans was introduced to Peter Brant, a star broker at Kidder, Peabody & Co. Brant, then in his early 30s, was making about $2 million a year. He was actually born Peter Bornstein but in 1976 legally changed his last name. He wanted to assimilate into Wall Street’s WASP-dominated culture, and to him, that meant shedding any trace of his ethnic background.
Their meeting was ostensibly professional — a potential profile piece.
Over the next few weeks, they met regularly and I got the feeling that from very early on, they both knew that they could use each other. Brant introduced Winans to the exclusive Racquet Club, followed by dinner at the "21" Club. He spoke freely about his wealth, his yacht parties, his sprawling real estate. By mid-1983, Brant had become one of Winans' go-to sources.
Brant's brash confidence and access to wealth played directly into Winans' growing frustrations and feelings of inadequacy. Brant flattered him openly. Learning Winans made only about $30,000 a year, Brant exclaimed at the injustice: "Isn't it terrible, only $30,000 a year, with all the skill and talent you have?" It was the sort of validation Winans longed for, delivered by a man who had everything he didn’t.
The Offer
The pivotal moment came on October 12, 1983. Meeting again at the Racquet Club, the two men exchanged pleasantries before Brant subtly shifted the conversation to Winans' financial struggles. And then, lowering his voice, he said: "You know, if I knew beforehand what was going to be in your column, we could make a lot of money."
The words hung in the air. According to Winans, Brant's tone was light, almost joking — but the meaning was deadly serious. And crucially, he didn’t say no to Brant’s remark-stroke-proposal.
And why would he say no? The idea of doing this very kind of thing with Brant had crossed his mind, I believe that it was probably on Brants and Winans minds pretty soon after they first met- everything up to now had been building to this moment, to this proposal from Brant -and remember, Winan’s and his partner Carpenter had already used his insider knowledge to make some money. So this wasn’t too big a jump for Winans even though he knew it was wrong- or in his own words: "I knew it was wrong. I knew it was unethical," Winans later testified.
But the offer tapped straight into his resentment, his needs, and the atmosphere of rampant greed that permeated Wall Street at the time. You can even see how he’d rationalise it: everyone else seemed to be cashing in. Maybe this wasn't such a big deal. It’s just a little side hustle, no one's getting hurt here.
Sealing the Pact
By Sunday, October 16, 1983, the conspiracy was sealed. Brant invited Winans to play golf at the Meadow Brook Club, a plush, private course on Long Island- I looked it up, it’s pretty nice and expensive- about $100,000 initiation fee, and then $1,500 a month. There, amid manicured greens they finalized their arrangement.
The deal was simple. Winans would leak advance information about "Heard on the Street" columns: what stocks would be mentioned, what the tone would be, and when the articles would run. Brant would use this information to trade ahead of publication — buying stocks about to get favorable coverage or shorting those slated for criticism.
Both men agreed on one critical point: Winans' journalistic work must remain unsullied. He would not slant his coverage to guarantee Brant's trades. The columns would remain genuine, allowing both men to pretend, if only to themselves, that they were not fully corrupt. Oh.. how honourable.
Winans made clear that last-minute editorial changes could derail their plans, and Brant accepted that risk. In return, Brant insisted that the mechanics of the trades would be his responsibility. Winans was fine with that- he wanted no details. In fact, he asked Brant pointedly not to tell him how much money was being made. You see Winans didn’t want to get involved in the trades at all- he just wanted to be paid for the leaks and so he asked for an upfront payment of $15,000. Brant agreed without hesitation. They also agreed that the check should not be made out to Winans directly. Instead, it would be written to David Carpenter, Winans' longtime partner and trusted confidant.
By introducing Carpenter into the arrangement, Winans subtly outed himself to Brant as a gay man, which would have been a big thing back in the 80’s — a detail that Brant accepted without pause. Carpenter would handle some of the logistics, helping to manage communications and payments.
Brant, for his part, brought another player into the fold: Ken Felis, a younger colleague at Kidder Peabody. Felis would help execute the trades, manage logistics, and share in the profits.
The First Leak
The plan moved from theory to practice on October 17, 1983 when Winans leaked to Brant that the Heard column for Tuesday was to be a positive column on oil drilling stocks. But that story was pulled when a more newsworthy article came up, resulting in a $46,000 loss. However Winan’s second leak a day later resulted in a profit of over $100,000.
Thus began a near-daily ritual: Winans passing along next-day column tips, Brant and Felis trading on the information.
The Routine of Corruption
Early on Brant had brought in another conspirator into the scheme- a trusted client, and indeed a friend, called David Clark and this allowed them to spread the pattern and minimize suspicion. Clark- a wealthy, well connected attorney was an alcoholic who by this stage was under huge stress as had been using his clients funds to trade recklessly and clients were starting to ask questions. Felis warned Brant, saying “Clark’s a pig; he’ll get us caught.” But Clarke, as well as providing new accounts to spread the trades, was also providing the money for the trades, and so Felis relented.
Brant paid Winan’s another $15,000 to take the total to $30,000.
Throughout this time, Winans kept up appearances impeccably. His columns remained professional and balanced. No sudden puff pieces, no transparent hatchet jobs. To Journal editors, he looked like a diligent, ethical reporter.
First Cracks Appear
However, in Kidder Peabody compliance officers began noticing troubling coincidences: large trades in stocks shortly before "Heard on the Street" columns mentioned them. Linked accounts included Ken Felis and David Clark.
Kidder launched a quiet internal inquiry. Brant and Felis denied everything. They claimed ignorance of any connection to The Wall Street Journal and spun flimsy stories about "coincidences."
Meanwhile, back at the Journal, Foster Winans was planning an exit. By early 1984, he had applied for a position at Standard & Poor’s, seeking a quieter, better-paying job. It might have ended cleanly. But elsewhere, the SEC was closing in.
The SEC Moves In
In February 1984, the SEC picked up the scent. Trading records flagged by Kidder Peabody caught regulators' attention. The SEC began investigating trading activity around "Heard on the Street" publication dates.
On March 1, the SEC contacted Kidder Peabody, David Clark, and The Wall Street Journal itself. That afternoon, the editor summoned Winans to an executive office where together with the WSJ’s general counsel they confronted Winans about potential leaks.
Winans denied any link to suspicious brokerage accounts, denied receiving money or gifts, denied everything. The editor, trusting his reporters, believed him. Winans returned to his desk, seemingly unscathed — but he must have known that they were onto him and that he was in big trouble.
That night, Winans and Carpenter panicked. Carpenter contacted Brant using a coded message: "the drapes are not hanging right." Winans drafted a memo outlining the SEC’s questions and his false answers, dispatching Carpenter to deliver it to Brant’s apartment.
When Brant read the note, he was initially relieved. But when Carpenter revealed that the 2 cheques for $30,000 had gone into a joint account shared with Winans, panic set in. The supposed insulation between Winans and the money was far more porous than Brant had realized.
Desperation and Cover Stories
The conspirators scrambled. They hatched plans for cover stories: claiming payments were for "decorating services" by Carpenter, portraying Brant as simply a savvy broker who "figured out" upcoming Journal stories through legitimate conversations.
Nothing was finalized, but the seeds of a desperate defense were planted. Meanwhile, Winans continued lying — sticking to his denials in a formal internal Journal interview on March 2.
By March 5, the SEC was tightening its net, contacting Brant directly. Brant lied again. Plans were floated for fleeing to Brazil, but ultimately abandoned.
And despite their carefully laid deception plan and their continued denials- there was just too much coincidence when the trades were examined- analysts flagged 27 instances where Brant sold stocks 6–18 hours before negative Heard columns ran. Clark’s account had a 92% correlation with “Heard on the Street” trades.
In mid-March, the Journal’s executives began cooperating fully with regulators. Their editors traveled to Washington to testify.
The Final Break
On March 21, the conspirators held a last-ditch meeting at Trader Vic’s in the Plaza Hotel. Brant laid out a unified story to maintain deniability. But Carpenter, drunk and agitated, made veiled threats of exposure. Tempers flared. Trust disintegrated.
That night, driving home, Winans and Carpenter decided to come clean. They no longer believed Brant and Felis would protect them.
On March 29, 1984, they confessed everything to the SEC. They gave detailed testimony implicating themselves, Brant, Felis, and Clark in the insider-trading ring. In doing so, Winans and Carpenter essentially flipped sides, cooperating with the investigation in hopes of leniency.
The SEC Cracks Down: Brant Breaks
Under mounting pressure from Kidder Peabody's compliance officers, Peter Brant cracked and facing up to 15 years in prison, he pointed the finger squarely at David Clark, shifting the blame, portraying himself as an unwitting participant rather than the architect.
Legal Gray Areas: The Fight Over Insider Trading
The legal terrain was untested. Winans’ columns were analysis, not company secrets. Could this even be considered insider trading? With no precedent, prosecutors turned to "misappropriation theory," arguing that Winans had stolen confidential information — not corporate data, but Dow Jones' intellectual property.
U.S. Attorney Rudolph Giuliani, yeah, that Giuliani- it’s easy to forget that he was actually at one stage in his life a very effective and talented prosecutor- poor Rudy, anyway he reframed the case as theft, not insider trading in the traditional sense. Defense lawyers pushed back, arguing that Winans wasn’t a corporate insider. Meanwhile, The Wall Street Journal’s position was shaky; while they claimed warnings had been issued, there had been no written policy until after the scheme was underway.
The Fallout: Convictions and Consequences
Prosecutors outlined the full scale: 46 trades, 27 companies targeted, $690,000 in profit- of which Winans only got $31,000- the other $1,000 came from a check Brant gave to Carpenter for a trip to London. I thought both Brant and Winans would have made form this- they made $100,000 from their second trade, so I thought their gains would have been at least a couple of million. As for Winans- he got less than 5%- now in my research, the prosecutors said that they had discussed Winan’s getting $25,000 per leak, but that never materialised. In June 1985, Winans was convicted on 59 counts and sentenced to 18 months in prison (reduced to nine months on appeal) and fined $5,000.
Brant, despite orchestrating the scheme, received just eight months and a $10,000 fine — a leniency Forbes scathingly called "a slap for the architect of destruction." Felis got probation. Carpenter, too, avoided prison.
Clark’s trial was separate and he was found guilty in 1987 but died 6 days before sentencing from alcohol related complications.
The scandal forced reforms across Wall Street and financial journalism.
Today, at 76, Winans lives quietly in Pennsylvania - he forged a successful career for himself after prison as a ghostwriter. As for Peter Brant -he just disappeared after his release from jail. After serving his sentence, he just vanished.
There are 2 things that I find really interesting about this story- the first is that financial stories move markets- that’s why we see short sellers like the hindenburg group produce these damning reports into companies- in the hope that they’ll get news coverage and this moves the stock price. But financial journalists themselves have real power- they know exactly what news is coming out in the next few days or weeks- and oftentimes this is news that no one else is privy. That’s leverage- they can profit from that. So the real surprise isn’t that Winans got caught—it’s that there haven’t been more cases like his. So despite the criticism that has been unjustly loaded onto traditional media over the last 10 years, it’s admirable that there haven’t been other such cases, and it underlines the strong sense of ethics that exists in traditional journalism.
The second thing that I love about this story is that in the grand scheme of things, this isn’t a big story in terms of the money involved, but it’s a great story because it’s the embodiment of the slippery slope: how a seemingly small ethical compromise (a meeting leads to another meeting, a dance of sorts that both Brant and Winans were aware where it was going to lead to, a simple arrangement to give your new buddy the heads up, no big deal- but you know in your heart of hearts that it’s wrong, your going against your moral compass (and Winan’s did have one, I don’t think Brant did), but I can see how easy it might happen, when you're doing a good job but you’re underpaid and feel unappreciated, when you’re meeting people every day who probably aren’t as smart as you yet they’re making 100 times what you make- and while I’d like to think that I wouldn’t go down the road that Winan’s went, I can definitely see how it could happen. And that’s what makes this a great business story. I hope you’ve enjoyed it as much as I have, and remember if you have any comments, any corrections or any story that you’d like us to cover, email us at: info@gbspod.com
All the best folks