Man pleads guilty to insider trading after overhearing wife’s work calls

A Texas man pleaded guilty to insider trading after he was accused of making $1.7 million in illegal profits by purchasing and selling stocks based on his wife’s work conversations, which he had overheard while she was working remotely at home, federal prosecutors said Thursday.

The man, Tyler Loudon, of Houston, bought 46,450 shares of stock in the truck stop and travel center company TravelCenters of America after he heard his wife discuss her employer’s proposed acquisition of it, according to a complaint filed in the Southern District of Texas by the U.S. Securities and Exchange Commission.

Loudon’s wife, who is not named in court documents, was a mergers and acquisitions manager at BP, a British oil and gas company, the complaint said.

On Feb. 16, 2023, TravelCenters of America announced that it had agreed to be acquired by BP, sending its stock prices soaring by 70.8%.

Loudon immediately sold all his stock, which he had bought without his wife’s knowledge, according to court documents.

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

Alamdar Hamdani, the U.S. attorney for the Southern District of Texas, announced Thursday that Loudon had pleaded guilty to securities fraud. Loudon also reached a partial judgment with the SEC, which had filed civil charges against him. BP declined to comment.

Loudon’s wife had started to work on BP’s proposed acquisition of TravelCenters of America in early 2022, the SEC’s complaint said. She and Loudon, who is employed at a publicly traded company, often worked in home offices within 20 feet of each other.

Federal prosecutors said Loudon either knew, or was “severely reckless in not knowing,” that information he overheard or was told about BP deals was confidential.

Loudon’s wife initiated divorce proceedings in June 2023.

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

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

This article originally appeared in The New York Times.