The husband of a BP employee has pleaded guilty to insider trading after he was accused of illegal share purchases having overheard his wife talking about a deal while working from home.
The US Securities and Exchange Commission (SEC) alleged that Tyler Loudon had made $1.76 million (€1.6 million) in illegal profits after buying up thousands of shares in TravelCenters of United States in advance of its $1.3 billion acquisition by BP in February 2023.
As part of his plea agreement, Loudon had agreed to forfeit the illegal proceeds, the US attorney’s office said. Sentencing has been set for May 17th, when Loudon faces up to five years in prison and a fine of up to $250,000.
Eric Werner, director of the SEC’s Fort Worth office, said Loudon “took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential”.
BP did not immediately respond to a request for comment, while Loudon could not be reached for comment.
In its complaint to the southern district of Texas court, the SEC alleged that Loudon had bought 46,450 shares in Ohio-based fuel station chain TravelCenters of United States in the weeks before its acquisition by BP, which he financed by selling shares in other companies to a value of more than $2 million.
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It said TA’s share price rose from $49.94 to $84.83 when the deal was made public on February 16th, 2023, whereupon it alleged that Loudon sold all his TA holdings.
The SEC said Loudon’s wife had worked on BP’s acquisition of TA during 2022, including while the couple holidayed in Rome in late December. For much of this time, it said, they worked in home offices “within 20 feet of each other” and frequently witnessed and overheard each other’s work-related conversations.
It said Loudon’s wife acknowledged discussing the deal with Loudon “during the normal course of marital communications” and that Loudon knew “or was severely reckless in not knowing” that such information was non-public and that he had a duty to keep it confidential.
Loudon, it alleged, did not initially tell his wife about his buying and selling of TA stock but confessed to her in April 2023 after she told him that all BP employees who worked on the deal would come under scrutiny.
“Stunned by this revelation,” the SEC said, Loudon’s wife reported it to her supervisor at BP and was put on administrative leave. BP, the SEC said, found no evidence that she knowingly leaked information to Loudon but terminated her employment.
Loudon’s wife moved out of their house, it said, and began divorce proceedings in June 2023.
The SEC described Loudon as employed by a publicly traded company. It asked the court to ban him from acting as an officer or director of any US-listed company, to recover with interest “all ill-gotten gains” from the alleged violations and to impose civil penalties. — Copyright The Financial Times Limited 2024
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