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The husband of a BP employee has been charged with insider trading in the US after claiming he overheard the details of his wife’s phone calls while she was working from home.
The US Securities and Exchange Commission claimed that Tyler Loudon made $1.76 million (£1.39 million) in ill-gotten gains.
Regulators alleged that Mr. Loudon overheard some of his wife’s conversations about BP’s acquisition of Travel Centers of America and purchased stock in the company.
BP declined to comment.
“The SEC alleges that Mr. Loudon took advantage of his remote work environment and his wife’s trust in him to obtain and profit from information he knew was confidential,” the SEC said.
His wife is a mergers and acquisitions manager at BP, where she worked on the oil giant’s acquisition of Travel Centers. According to the SEC, Mr. Loudon bought 46,450 shares of Travel Center stock without his wife’s knowledge before the transaction was made public last February.
Following the announcement, Travel Centers’ stock price rose nearly 71%, and Mr. Loudon quickly sold all of his newly purchased shares for a profit, the SEC said.
divorce
During the 2022 transaction negotiations between Travel Centers and BP, Mr. Loudon, of Houston, Texas, and his wife worked from home offices within 20 feet of each other, according to the regulatory complaint.
“As a result, they frequently overheard and witnessed each other’s work-related conversations and video conferences.” Also, the complaint says, while the couple was staying in a “small Airbnb” in Rome. She said she was working on the deal.
Loudon confessed to his wife about the Travel Center stock purchase after the financial industry regulator began questioning him about his dealings with BP and who was “in the know.”
He bought the stock because he “wanted to make enough money so that she no longer had to work long hours,” the filing said.
His wife was “stunned by this revelation” but reported the transaction to her superiors at BP.
Her emails and text messages were examined by BP, but no evidence was found that she intentionally divulged information about the transactions to her husband or that she knew he had purchased the stock.
However, “BP nevertheless terminated her employment,” the filing states.
Loudon’s wife left the house and cut off all contact with him, according to the regulator’s complaint. In June she began divorce proceedings.
The SEC said in a statement that Mr. Loudon does not deny the charges and has agreed to pay the fine.
He also faces possible criminal charges and, if convicted, could face prison time.
During the pandemic, when many employees were unable to work from the office, UK regulator the Financial Conduct Authority (FCA) warned about managing insider trading risks when working from home.
As working from home becomes entrenched in many organizations’ working patterns, the FCA said the “need for effective monitoring at all times” remains important.
