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The husband of a BP manager has pleaded guilty to insider trading after overhearing his wife discussing a big deal while working from home.
The US Securities and Exchange Commission (SEC) alleged that Tyler Loudon made £1.4 million in illegal profits from these illegal eavesdropping.
The regulator claimed Loudon bought thousands of shares in TravelCenters of America (TA) after discovering it was about to be bought by the energy giant.
He had listened to his wife, who was then a BP mergers and acquisitions manager, discuss the acquisition while they worked from home 20 feet away from each other.
This led Loudon to purchase 46,450 TravelCenters shares without their knowledge before the deal became public, the SEC said.
Investigation: US Securities and Exchange Commission alleged Tyler Loudon made £1.4m in illegal profits from eavesdropping
In February last year, BP formally announced it would buy TravelCenters for £1bn, sending shares in the fuel station group soaring by over 70 per cent. Loudon, 42, quickly sold all his shares in the company, making a £1.4m profit.
He initially did not tell his wife about his trading, but later confessed to her in April 2023.
Loudon’s wife had worked on BP’s acquisition of TravelCenters during 2022, even as the couple vacationed in Rome in late December.
The document says Loudon’s wife said she had discussed the agreement with Loudon “during the normal course of marital communications” and that Loudon knew “or was very reckless in not knowing” that he had a duty to keep it confidential.
According to the document, Loudon said she bought the shares because “she wanted to make enough money so that she would not have to work more hours.” But Eric Werner, the SEC’s regional director, said Loudon “took advantage of his remote work conditions and the trust of his wife to exploit information he knew was confidential.”
His wife reported his transactions to BP, who fired her despite finding no evidence that she had knowingly leaked the deal.
BP reviewed emails and text messages from Loudon’s wife and found no evidence that she leaked the acquisition or knew about her husband’s operations.
The filing said Loudon works at an unnamed publicly traded company.
His wife began divorce proceedings in June 2023. As part of her plea deal, she will forfeit the cash. He will be sentenced in May and faces up to five years in prison and a fine of up to £197,000.
BP declined to comment.
The saga will set off alarm bells for City businesses, which regularly allow negotiators to work from home. The regulator, the Financial Conduct Authority (FCA), previously warned about managing the risks of insider trading when working from home after the pandemic.