Tyler Loudon of Houston, Texas, was charged with unlawful insider trading after allegedly making $1.76 million from eavesdropping on his wife’s phone calls about BP’s plan to acquire TravelCenters of America, a full-service truck stop and travel center company.
In a press release published on February 22, the Securities and Exchange Commission (SEC) accused Loudon of allegedly purchasing over 46,000 shares of TravelCenters stock ahead of the planned merger, announced in February 2023. Officials claimed that the Houston resident acquired “nonpublic” information about the merger after he heard his wife, a BP mergers and acquisitions manager, discussing private details about the oil company’s business move over her work-related phone calls and video conferences in 2022. At the time, the pair worked remotely at home within “20 feet of each other” due to pandemic-era work-from-home policies.
Acting without her knowledge, Loudon purchased 46,450 shares of TravelCenters stock before the merger was publicly announced on February 16, 2023. Following the announcement, TravelCenter’s stock surged by nearly 71 percent. Loudon allegedly sold all his TravelCenters shares, gaining a profit of $1.76 million.
In February, the SEC filed a complaint against Loudon in the U.S. District Court for the Southern District of Texas, accusing the Pepperdine University graduate of violating the antifraud provisions of the federal securities laws. These provisions are designed to prevent fraudulent activities and ensure transparency and integrity in the financial markets.
The commission accused him of violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, which prohibits any act or practice that employs manipulative or deceptive devices in connection with the purchase or sale of securities, such as misrepresentation or omission of material facts, insider trading, or any other dishonest practice that could defraud investors.
In court, Loudon pleaded guilty and agreed to a partial judgment, which would permanently prohibit him from violating the antifraud provisions of federal securities laws. He will also be required to repay the cash earned from his alleged investment scheme. The court will determine the exact amount in the coming months as the investigation is still ongoing.
Loudon will be sentenced on May 17. He faces up to five years in federal prison and a possible fine of up to $250,000.
“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,” Eric Werner, regional director of the SEC’s Fort Worth regional office, said. “The SEC remains committed to prosecuting such malfeasance.”
Loudon’s wife also admitted to occasionally discussing the BP acquisition with her husband in passing. It’s unclear if she’ll face legal repercussions for doing so.
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