Profiting Rp 29 Billion from Eavesdropping: Wife Sacked, Husband Jailed
Illegal investment practices were carried out by a man from Texas, who gained illegal profits of US$1.76 million, equivalent to Rp30.62 billion. He traded shares using insider information after overhearing his wife’s work conversation at home.
US Federal Prosecutors last year revealed that Tyler Loudon from Houston bought 46,450 shares in the transport and logistics company TravelCenters of America after hearing his wife discuss a proposed acquisition of the company with her boss over the phone. The lawsuit was filed in the Southern District of Texas court by the US Securities and Exchange Commission (SEC).
Loudon’s wife, whose name is not mentioned in the court documents, is a mergers and acquisitions manager at BP, the British oil and gas giant.
On 16 February 2023, TravelCenters of America announced that it had agreed to be acquired by BP, causing its share price to surge by 70.8%.
After the surge, Loudon immediately sold all the shares he had bought without his wife’s knowledge, according to the court documents.
“Tyler Loudon made a serious mistake in his decision-making and he takes full responsibility,” said Tyler Loudon’s lawyer, Peter Zeidenberg, quoted from the New York Times on Monday (26/2/2024).
Alamdar S. Hamdani, the US Attorney for the Southern District of Texas, announced that Loudon had pleaded guilty to securities fraud. The Texas man also reached a partial settlement with the SEC, which had filed a civil lawsuit against him. BP declined to comment.
Tyler Loudon’s wife began working on BP’s proposed acquisition of TravelCenters of America in early 2022. She and Loudon, who works at a public company, often worked from home (WFH) about 6 metres apart.
Federal prosecutors said that Loudon knew, or “was extremely reckless if he did not know,” that the information he heard or was told about the BP deal was confidential.
Loudon began buying TravelCenters of America shares on 27 December 2022, and over the next seven weeks, according to the complaint, he “methodically” sold about US$2.16 million worth of positions from his individual brokerage account and his Roth IRA to buy more TCA shares.
He did not tell his wife, said the federal prosecutors. After the merger was publicly announced, the Financial Industry Regulatory Authority, a private business regulator, requested information from BP in late March 2023 about the deal, according to the complaint.
Loudon’s wife told her husband that a former colleague working on the acquisition had complained to her about BP’s lawyers, who were asking for personal information. Loudon asked his wife if other employees would undergo similar scrutiny, and she replied that they would do the same.
A week later, Loudon told his wife that he had bought the shares before the acquisition, but he did not say how many shares or how much money he had made, according to the complaint.
Loudon’s wife was “shocked” by this admission, according to the complaint, and informed her boss. She was then placed on administrative leave and ultimately sacked.
BP reviewed Loudon’s wife’s texts and emails and found no evidence that she intentionally leaked information or knew about her husband’s trading.
“After Loudon’s admission, Mrs Loudon moved out of their home and ceased contact with Loudon,” said the complaint. Loudon’s wife initiated divorce proceedings in June 2023.
In mid-2024, Tyler Loudon was sentenced to two years in prison for the insider trading practice that generated profits of US$1.76 million. Tyler Loudon was also given one year of supervised release after his prison term and a fine of US$10,000 by the US District Court Judge in Houston.