Texas man eavesdropping on wife’s phone calls faces criminal charges — and divorce — after $1.76 million insider trading plot

Texas man eavesdropping on wife’s phone calls faces criminal charges — and divorce — after $1.76 million insider trading plot

Feb 26,2024
New York CNN  — 

A Texas man is facing insider trading charges and jail time after he used information gleaned from eavesdropping on his wife’s work-from-home calls, netting him $1.76 million from an upcoming oil industry acquisition.

The Securities and Exchange Commission on February 22 charged Houston-based Tyler Loudon after he became aware that BP, where his wife was a mergers and acquisitions manager, planned to acquire truck stop operator TravelCenters of America, according to an SEC filing.

“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,” said Eric Werner, regional director of the SEC’s Fort Worth regional office, in a press release. “The SEC remains committed to prosecuting such malfeasance.”

BP declined to comment.

Loudon purchased 46,450 shares of TravelCenters stock after learning of the impending merger, according to an SEC filing. When the share price popped 71% following the announcement, he sold all of his shares, raking in more than $1.76 million.

The SEC’s complaint, filed in the US District Court for the Southern District of Texas, charges Loudon with violating the antifraud components of federal securities laws. The US Attorney’s Office for the Southern District of Texas has also announced that Loudon pleaded guilty to one count of securities fraud, which carries a maximum imprisonment term of up to five years. Sentencing in the case is set for May 17.

“Mr. Loudon made a serious mistake in judgment which he deeply regrets and for which he has taken full responsibility,” said Peter Zeidenberg, Loudon’s lawyer, in a statement to CNN.

Loudon began buying up TravelCenters stock in December 2022, selling all his positions in his individual brokerage account and Roth IRA totaling approximately $2.16 million in the process, according to the SEC filing.

He did not tell his wife about his purchases and sales of TravelCenters stock but confessed to her in April 2023 after BP’s lawyers asked for his wife’s home address and personal information, according to the filing.

She reported the trading to her supervisor and was later terminated from the company, according to the filing.

Loudon’s wife has since moved out of their shared home, ceased most contact with him and started divorce proceedings last June, the filing said.

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