Texas man pleads guilty to insider trading after overhearing his wife’s business calls

A Texas man pleaded guilty to insider trading after being accused of making $1.7 million in illegal profits by buying and selling stocks based on his wife’s business conversations, which he had heard while she was working remotely at home, 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 plans for her employer to acquire it, according to a complaint filed in the Southern District of Texas by the United States Securities and Exchange Commission.

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

On February 16, 2023, TravelCenters of America announced that it had agreed to be acquired by BP, causing its stock price to rise 70.8%.

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

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

Alamdar S. Hamdani, United States Attorney for the Southern District of Texas, announced Thursday that Mr. Loudon had pleaded guilty to securities fraud. Mr. Loudon also obtained a partial judgment from the SEC, which had filed a civil complaint against him. BP declined to comment.

Mr. Loudon’s wife had begun work on BP’s proposed acquisition of TravelCenters of America in early 2022, according to the SEC complaint. She and Mr. Loudon, who works at a publicly traded company, often worked in home offices less than 20 feet apart.

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

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

He did not tell his wife, federal prosecutors said.

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

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

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

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

BP reviewed Mr. Loudon’s wife’s text messages and emails and found no evidence that she knowingly disclosed the information or was aware of her husband’s business activities.

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

Mr. Loudon faces a maximum sentence of five years in prison and a maximum fine of $250,000, according to prosecutors.

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