Federal regulators have accused a Houston man of making nearly $1.8 million through a simple get-rich-quick scheme: spying on his wife.
The Houston man, who acted without his wife's knowledge, pleaded guilty to buying TravelCenters of America stock
Federal regulators have accused a Houston man of making nearly $1.8 million through a simple get-rich-quick scheme: spying on his wife.
The U.S. Securities and Exchange Commission on Thursday filed charges against Tyler Loudon, accusing him of taking advantage of working remotely and breaching “his duty of trust and confidence to his wife,” according to a complaint filed in U.S. District Court for the Southern District of Texas.
Loudon is alleged to have listened in on several calls held by his wife, a now-former mergers and acquisitions manager at British oil and gas giant BP $BP, discussing the $1.3 billion acquisition of Ohio-based TravelCenters of America.
Without his wife’s knowledge, Loudon purchased 46,450 shares of TravelCenters stock before the merger was announced on Feb. 16, 2023; the announcement sent the company’s stock up by nearly 71%. He then sold all of his shares for a profit of $1.76 million, according to the SEC.
More than a month later, in April, Loudon confessed to his wife. Loudon told her that he only bought the stock because he wanted to make enough money that she could stop working long hours. She then reported the trading to her supervisor at BP and — despite an internal probe finding no evidence she had helped her husband — was subsequently fired. She later moved out of their home and filed for divorce.
“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, the director of the SEC’s Forth Worth regional office, said in a statement.
Loudon has pleaded guilty to the charges and agreed to a partial judgement, subject to court approval. He faces up to five years in federal prison and a fine of as much as $250,000. Sentencing is scheduled for May.
The incident may fuel fears of so-called “pillow talk” securities fraud, where insider traders learn confidential information from spouses and other partners, which became more common after the covid pandemic.
“During Covid, there was an uptick in brazen conduct,” Edward Imperatore, a defense lawyer at law firm Morrison & Foerster, told The Wall Street Journal last month. “In a work-from-home environment, people acted with more impunity.”
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