A Texas man has pleaded guilty to insider trading after eavesdropping on his wife’s work call. The husband who listened in on his wife’s calls reportedly made $1.75 million buying shares after overhearing sensitive business details of BP. Hence, the Texas man has to give up all the money.
In addition, he is facing up to five years in federal prison, a hefty fine, and a divorce. Tyler Loudon, 42, from Houston, Texas, pleaded guilty on Thursday, February 22, 2024, after he bought and sold stock based on illegally obtained information.
According to the U.S. Department of Justice, Loudon made $1.75 million illegally from trading stocks on insider information. Court documents reveal that Loudon heard his wife discuss taking over some companies. The wife reportedly discussed how her company planned to acquire a truck stop and travel center company.
Although the DOJ does not identify Loudon’s wife, it says she was an associate manager in mergers and acquisitions for a London-based oil and gas company. After listening in on his wife’s conference call about BP’s acquisition of an American-based travel company, he seized the opportunity.
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He saw the proposed $1.3 billion takeover as an opportunity to profit and invest in the company’s stocks. The FBI, the Securities and Exchange Commission, and the Financial Industry Regulatory Authority began investigating the case.
During their investigation, the agencies learned that Loudon engaged in the act without his wife’s knowledge. They discovered he used confidential information he overheard from the acquisition call to buy 46,450 shares in December 2022. TravelCenters’ shares then skyrocketed 71% after the public disclosure on February 16, 2023.
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Afterward, Loudon immediately sold his shares for an enormous profit, pocketing almost $2 million. According to the US Attorney’s Office for the Southern District of Texas, Loudon’s wife was unaware of his crimes. She reportedly had no idea of what he had been up to while she was working remotely.
However, he later told his wife, saying he did it so they could have enough money and she could work shorter hours. Unfortunately, Loudon’s supposed act of love did not sit well with his wife. The unidentified woman left the house and began divorce proceedings in June 2023.
According to CNN, his wife reported the trading to her supervisor when she found out. However, the company put her on administrative leave before terminating her employment. Although there has been no proof that she knowingly leaked the information, BP fired her.
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Eric Werner, the director of the Securities and Exchange Commission’s Fort Worth office, spoke about the case. He said Loudon “took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential.”
Despite pleading guilty, Loudon faces up to five years in a federal prison. In addition, he faces a possible fine of up to $250,000 at his scheduled May 17 hearing.
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