HomeBusinessMan forfeits $1.7M he made after overhearing wife’s remote work for BP

Man forfeits $1.7M he made after overhearing wife’s remote work for BP

While he and his wife worked in close quarters at their Houston home, Tyler Loudon often overheard her conversations — even the confidential ones, according to court filings. In some of those discussions, it was mentioned that BP, the multinational oil company Loudon’s wife worked for, planned to acquire a large truck-stop operator, authorities said.

Knowing this information, Loudon bought tens of thousands of shares in stock in TravelCenters of America, officials alleged. When the deal was announced in February 2023, Loudon liquidated his shares to make $1.76 million, authorities said.

On Thursday, federal prosecutors announced that Loudon, 41, had pleaded guilty to securities fraud. Loudon, who faces up to five years in prison, will forfeit the $1.76 million he made from the confidential information, authorities said.

Peter Zeidenberg, Loudon’s attorney, told The Washington Post that his client “made a terrible mistake in judgment, regrets it greatly, and he’s taken responsibility for it.”

A BP spokesman declined to comment.

Loudon’s wife, who was a mergers and acquisitions manager for BP, was unaware that Loudon had relied on her work information to buy shares of stock, according to a complaint the Securities and Exchange Commission filed against Loudon on Thursday in the U.S. District Court for the Southern District of Texas.

The SEC’s complaint stems from a separate civil case against Loudon, who recently agreed to a partial judgment with the federal government agency.

“Mr. Loudon took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential,” Eric Werner, a regional director for the SEC, said in a statement. “The SEC remains committed to prosecuting such malfeasance.”

The incident occurred in the aftermath of the coronavirus pandemic, when many employees continued to work from home. Managers and employees have debated the productivity of remote work in recent years, but Loudon’s case sheds light on the risks of discussing confidential information near family and friends outside of the office.

Near the start of 2022, BP asked Loudon’s wife to help with the company’s potential acquisition of TravelCenters of America, a truck stop and travel center operator headquartered in Westlake, Ohio, and told her information regarding the dealings was confidential, the SEC’s complaint said.

Throughout that year, Loudon and his wife often worked in home offices within 20 feet of each other and could hear each other’s discussions, according to the complaint. In December 2022, the couple traveled to Rome, where Loudon’s wife regularly worked on the acquisition and discussed the deal while Loudon was seated nearby — a habit that continued after they returned to the United States and through the acquisition announcement, the complaint said.

Loudon’s wife also acknowledged to investigators that she discussed aspects of the acquisition with Loudon “during the normal course of marital communications,” the complaint said.

“Loudon knew, or was severely reckless in not knowing,” the complaint added, “that information regarding potential BP deals, including the acquisition of [TravelCenters of America], was material, nonpublic information that he had a duty to keep confidential.”

In December 2022 — the same month BP offered to acquire TravelCenters of America — Loudon began purchasing shares of stock in the travel center operator, and he ultimately collected 46,450 shares, according to the complaint.

On Feb. 16, 2023, BP announced it had acquired TravelCenters of America, increasing the travel center operator’s stock by nearly 71 percent, prosecutors said. That day, Loudon sold all of his shares to make $1.76 million, authorities said.

In March 2023, the Financial Industry Regulatory Authority requested from BP the names of people who had prior knowledge of the acquisition, according to the complaint. Loudon’s wife told her husband that a former BP employee, who had worked on the deal, complained to her that the company’s lawyers were asking for personal information. Loudon asked his wife if they would be investigated; she said they would, the complaint said.

The next month, Loudon confessed to his wife that he had bought stock in TravelCenters of America before the acquisition was announced, the complaint alleged. He told her that “he wanted to make enough money so that she did not have to work long hours anymore,” the complaint said.

Loudon’s wife, who was “stunned,” the complaint said, told her supervisor about Loudon’s dealings, prompting the company to place her on administrative leave. BP, which reviewed her emails and texts, didn’t find evidence that Loudon’s wife knowingly leaked information but still fired her, the complaint alleged.

Loudon’s wife moved and stopped speaking with her husband, according to the complaint. While Loudon apologized to her in a handwritten letter, his wife began divorce proceedings in June, the complaint said.

Federal prosecutors filed criminal charges against Loudon on Feb. 6.

In addition to forfeiting the money he made in illegal trades, Loudon could face a $250,000 fine, prosecutors said. His sentencing is scheduled for May.

Source link



Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments