Houston man Tyler Loudon’s wife works as BP mergers and acquisitions manager. Recently, he overheard his wife on a work call discussing an upcoming merger between her company and TravelCenters of America Inc.
Using this privileged information, Loudon bought 46,450 shares of the latter’s stocks ahead of the announcement, and then sold if after the announcement, netting him a cool $1.76 million!
But as quickly as Loudon earned the money, it was taken away from him, because that, unfortunately, is a classic case of insider trading. Insider trading is a big no-no.
The SEC filed a complaint against Loudon in the U.S. District Court for the Southern District of Texas, accusing him of “violating the antifraud provisions of the federal securities laws.”
Eric Werner, regional director of the SEC’s Fort Worth office, said in a statement per NBC News, “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.”
Loudon did not deny the allegations against him and pleaded guilty to the charges of securities fraud filed by the U.S. Attorney’s Office for the Southern District of Texas, and agreed to forfeit the $1.76 million to authorities, according to the U.S. attorney’s office.
Loudon will be sentenced on May 17 and faces up to five years in federal prison, as well as a $250,000 maximum fine.
No word on how the marriage is doing.
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