The husband of a BP employee is facing insider trading charges in the United States, accused of making $1.76 million in illegal profits by overhearing details of confidential calls made by his wife while working from home. The US Securities and Exchange Commission (SEC) has brought charges against Tyler Loudon.
According to the SEC, Loudon allegedly overheard several conversations about BP’s takeover of TravelCenters of America, where his wife was a mergers and acquisitions manager. Taking advantage of his remote working conditions, Loudon reportedly purchased 46,450 shares of TravelCenters stock without his wife’s knowledge before the public announcement of the deal in February last year.
Following the announcement, TravelCenters’ share price surged nearly 71%, and Loudon allegedly immediately sold all the newly acquired shares for a substantial profit. The SEC claims he exploited his wife’s trust to gain confidential information.
While BP has chosen not to comment on the matter, the SEC stated, “We allege that Mr. Loudon took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential.”
During the investigation, it was revealed that Loudon confessed to his wife about buying TravelCenters shares after the Financial Industry Regulatory Authority (FINRA) started inquiring about the BP deal. According to the SEC filing, he admitted buying the stock to make enough money so his wife would no longer have to work long hours.
Despite finding no evidence that Loudon’s wife knowingly leaked information about the deal or was aware of his stock purchase, BP terminated her employment.
The SEC’s complaint also disclosed that Loudon’s wife moved out of their house, initiated divorce proceedings in June, and ceased all contact with him.
The SEC emphasised that Loudon did not deny the allegations and agreed to pay a penalty. In addition to potential criminal charges, he could face a prison sentence if convicted.
The case underscores the challenges of managing insider trading risks when employees work remotely, a concern that regulators have emphasised during the pandemic.
