The husband of a BP executive has pleaded guilty to insider trading after overhearing his wife discussing a major deal while she worked from home.
The US Securities and Exchange Commission (SEC) alleged that Tyler Loudon made £1.4 million in illegal profits from this wiretapping.
The regulator alleged that Loudon bought thousands of shares in TravelCenters of America (TA) after discovering it was about to be bought by the energy giant.
He had heard his wife, then a mergers and acquisitions manager at BP, discussing the takeover as they worked from home, within twenty feet of each other.
This prompted Loudon to buy 46,450 shares of TravelCenters without her knowledge before the deal was made public, the SEC said.
Probe: The US Securities and Exchange Commission alleged that Tyler Loudon made £1.4 million in illegal profits from this wiretapping
In February last year, BP formally announced it would buy TravelCenters for £1 billion, sending the forecourt group’s shares soaring by more than 70 percent. Loudon, 42, quickly sold all his shares in the company, making a profit of £1.4 million.
He initially did not tell his wife about his dealings, but later confessed to her in April 2023.
Loudon’s wife had participated in BP’s acquisition of TravelCenters in 2022, including when the couple went on holiday to Rome in late December.
The filing said Loudon’s wife said she discussed the deal with Loudon “during the normal course of the marriage” and that Loudon knew “or was grossly reckless in not knowing” that he had a duty to to be kept confidential.
According to the filing, Loudon said he bought the stock because “he wanted to make enough money so she wouldn’t have to work long hours anymore.” But Eric Werner, regional director at the SEC, said Loudon “took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential.”
His wife reported his dealings to BP, which fired her despite finding no evidence that she had knowingly leaked the deal.
BP reviewed the emails and text messages of Loudon’s wife and found no evidence that she had leaked the takeover or was aware of her husband’s dealings.
According to the filing, Loudon is employed by an unnamed publicly traded company.
His wife started divorce proceedings in June 2023. As part of his settlement, he will forfeit the money. He will be sentenced in May and faces up to five years in prison and a fine of as much as £197,000.
BP declined to comment.
The saga will set alarm bells ringing at city companies, which regularly allow dealmakers to work from home. Regulator the Financial Conduct Authority (FCA) has previously warned about managing insider trading risks when working from home after the pandemic.