Man pleads guilty to insider trading after listening in on his wife’s work calls

A Texas man pleaded guilty to insider training after he was accused of making $1.7 million in illegal profits by buying and selling stocks based on his wife’s work conversations, which he overheard while they were remote at home worked, federal prosecutors said Thursday.

The man, Tyler Loudon, of Houston, bought 46,450 shares of truck stop and travel center company TravelCenters of America after overhearing his wife discussing her employer’s proposed takeover of it, according to a complaint filed in the Southern District of Texas by U.S. Securities and Exchange Commission.

Mr. Loudon’s wife, who is not named in court documents, was a mergers and acquisitions manager at BP, a British oil and gas company, the complaint said.

On February 16, 2023, TravelCenters of America announced that it had agreed to be acquired by BP, sending its stock prices up 70.8 percent.

According to court documents, Mr. Loudon immediately sold all of his stock, which he had purchased without his wife’s knowledge.

“Mr. Loudon made a terrible error in judgment for which he has taken full responsibility,” Mr. Loudon’s attorney, Peter Zeidenberg, said in an email.

Alamdar S. Hamdani, U.S. Attorney for the Southern District of Texas, announced on Thursday that Mr. Loudon had pleaded guilty to securities fraud. Mr. Loudon also reached a partial verdict with the SEC, which filed civil charges against him. BP declined to comment.

Mr. Loudon’s wife had begun working on BP’s proposed acquisition of TravelCenters of America in early 2022, the SEC complaint said. She and Mr. Loudon, who works at a publicly traded company, often worked in home offices within 20 feet of each other.

Federal prosecutors said Mr. Loudon knew, or was “highly reckless in not knowing,” that the information he heard or was told about BP deals was confidential.

Mr. Loudon began buying shares of TravelCenters of America on December 27, 2022, and over the next seven weeks, the complaint said, he “methodically” sold approximately $2.16 million in positions from his individual brokerage account and his Roth IRA to gain more to buy shares. the company’s shares.

He didn’t tell his wife, federal prosecutors said.

After the merger was publicly announced, the Financial Industry Regulatory Authority, a regulator for private companies, requested information from BP about the deal in late March 2023, the complaint said.

Mr. Loudon’s wife told her husband that a former colleague who had worked on the takeover had complained to her about BP’s lawyers asking for personal information. Mr. Loudon asked his wife if other employees would be under similar supervision and she said they would.

A week later, Mr. Loudon told his wife that he had bought shares of the stock before the acquisition, but he did not say how many shares or how much money he had made, the complaint said.

According to the complaint, Mr. Loudon’s wife was “stunned” by this admission and told her supervisor. She was placed on administrative leave and eventually fired.

BP viewed the text messages and emails from Mr. Loudon and found no evidence that she knowingly leaked the information or was aware of her husband’s dealings.

“After Loudon’s confession, Loudon’s wife left their home and generally ceased all contact with Loudon,” the complaint said. Mr Loudon’s wife initiated divorce proceedings in June 2023.

According to prosecutors, Mr. Loudon faces a maximum prison sentence of five years and a possible fine of up to $250,000.

Mr. Loudon also agreed in the settlement to forfeit his $1,763,522 winnings to the United States. His sentencing is scheduled for May 17.