Man Admitted Guilty to Insider Trading After Overhearing Wife’s Work Calls

A Texas man admitted to insider trading following allegations that he made $1.7 million in unlawful profits by trading stocks based on his wife’s work discussions, which he overheard while she was working from home, according to federal prosecutors on Thursday.

Tyler Loudon, a man from Houston, purchased 46,450 shares of stock in TravelCenters of America after learning about the company’s potential acquisition from his wife, as stated in a complaint filed by the U.S. Securities and Exchange Commission in the Southern District of Texas.

According to the complaint, Mr. Loudon’s wife, who remains unnamed in court records, worked as a mergers and acquisitions manager at BP, a British oil and gas company. TravelCenters of America announced on Feb. 16, 2023, that it had agreed to be acquired by BP, causing its stock prices to surge by 70.8 percent. According to court documents, Mr. Loudon promptly sold all of his stock, which he had purchased without his wife’s awareness.

“Mr. Loudon made a serious error in judgment for which he has fully accepted responsibility,” stated Mr. Loudon’s lawyer, Peter Zeidenberg, in an email.

Alamdar S. Hamdani, the U.S. attorney for the Southern District of Texas, stated on Thursday that Mr. Loudon had admitted to securities fraud. Mr. Loudon also came to a partial agreement with the S.E.C., which had brought civil charges against him. BP chose not to provide a comment.

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According to the S.E.C.’s complaint, Mr. Loudon’s wife began working on BP’s proposed acquisition of TravelCenters of America in early 2022. She and Mr. Loudon, who works at a publicly traded company, frequently worked in home offices located within 20 feet of each other. Federal prosecutors stated that Mr. Loudon was either aware or showed extreme negligence in not being aware that the information he learned about BP deals was confidential.

Mr. Loudon started purchasing TravelCenters of America stock on Dec. 27, 2022. Over the following seven weeks, he systematically sold around $2.16 million in positions from his individual brokerage account and Roth IRA to buy more of the company’s stock. According to federal prosecutors, he failed to inform his wife. Following the public announcement of the merger, the Financial Industry Regulatory Authority, a private business regulator, asked BP for information regarding the deal in late March 2023, according to the complaint.

Mr. Loudon’s wife informed him that a former colleague who had been involved in the acquisition had expressed dissatisfaction with BP’s lawyers requesting personal information. Mr. Loudon inquired with his wife about the possibility of other employees facing the same level of scrutiny, to which she confirmed.

A week later, Mr. Loudon informed his wife that he had purchased shares of the stock prior to the acquisition, without disclosing the number of shares or the amount of profit he had earned, according to the complaint. Mr. Loudon’s wife was shocked by this revelation, as stated in the complaint, and informed her supervisor. She was put on administrative leave and later fired.

BP examined the texts and emails of Mr. Loudon’s wife and did not find any evidence that she intentionally disclosed the information or was aware of her husband’s trading.

According to the complaint, Loudon’s wife moved out of their house and cut off contact with Loudon after his confession. In June 2023, Mr. Loudon’s wife started divorce proceedings. Prosecutors stated that Mr. Loudon could potentially receive up to five years in prison and a fine of $250,000. Mr. Loudon agreed to forfeit his $1,763,522 profit to the United States as part of the plea agreement. He will be sentenced on May 17.