The husband of a former manager at British oil and gas giant BP has pleaded guilty to insider trading after he took advantage of sharing a workspace with his now estranged wife during the pandemic to make a $1.8 million profit.
Tyler Loudon is facing up to five years in jail and a $250,000 fine after secretly buying up shares in truck stop service TravelCentres of America, according to court reports seen by Fortune.
A case that began as a husband trying to fraudulently make enough money so his wife could work less hectic hours has led to her being fired and the beginning of divorce proceedings.
Work-from-home disaster
Like many couples, 42-year-old Loudon and his wife found themselves boxed together in their Houston home during COVID-19 lockdowns.
Loudon’s wife began working in BP’s mergers and acquisitions team in October 2021, where she was initially tasked with investigating the feasibility of acquiring truck-stop service TravelCenters of America.
She returned to the acquisition in November 2022 after working on another task for six months.
Working in a team looking to land a billion-dollar acquisition is tough work. Endless hours of scrutiny, interrogation of employees, and constant anxiety until a name is signed on the dotted line means it’s not a job for the faint-hearted.
But Loudon’s wife was unaware that her biggest headache was sitting in the next room.
The couple worked within 20 feet of each other at their Houston home, with court filings indicating the pair often overheard and witnessed each other’s workplace conversations and video calls.
This potential conflict of interest is something millions of people have encountered daily since stay-at-home orders came into force in 2020, and avoiding that risk relies on a strong foundation of trust.
Loudon’s wife had signed an “in the know” statement agreeing not to buy TravelCentres stock.
Loudon became increasingly familiar with BP’s impending buyout of TravelCentres as he listened to his wife’s conversations as negotiations ramped up.
This included conversations he overheard during a trip to Rome in late December 2022 where Loudon’s wife would take calls from the couple’s tiny Airbnb vacation rental.
Loudon pockets $1.8 million profit
It was around this time that Loudon began picking up shares in TravelCentres, unbeknownst to his wife.
Over the next seven weeks, Loudon bought up 46,450 shares in the company. By Feb. 15, 2023, his stake was worth $1.82 million.
A day later, BP announced that it was acquiring TravelCentres for $1.8 billion, a revised offer that represented a big premium on its share price.
Shares in the company jumped nearly 71% after the deal was announced, and Loudon immediately sold his stake for a profit of $1.76 million, while continuing to hide his actions from his wife.
Loudon eventually confessed to his wife after she mentioned that investigators had asked BP for her address.
Loudon’s wife, stunned by the admission, was placed on administrative leave after informing BP of her husband’s behavior.
While BP didn’t find any wrongdoing by Loudon’s wife, she was ultimately fired by the group.
A representative for BP didn’t respond to Fortune’s request for comment.
Loudon’s wife moved out of the couple’s home and cut off contact with him after his confession.
A handwritten letter delivered by Loudon apologizing for violating his wife’s trust was used as evidence in court.
In June last year, she began divorce proceedings.
Loudon has now admitted to insider trading and faces a lengthy prison sentence in addition to a steep fine.
“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,” said Eric Werner, regional director of the SEC’s Fort Worth regional office. “The SEC remains committed to prosecuting such malfeasance.”
