SEC Charges Texas Man with Insider Trading Based on Non-Public Information He Overheard While His Wife was on a Remote Work Call

Daniel Fridman
February 23, 2024
Securities Law

In a case that says as much about today’s work-from-home climate as it does about securities fraud, the SEC has charged Tyler Loudon of Houston, Texas for trading on confidential information he overheard while his wife, a mergers and acquisitions manager with London-based oil and gas company BP, PLC, was on a remote call. The SEC’s complaint alleges that Loudon misappropriated material, non-public information, namely, a February 2023 announcement that BP PLC agreed to acquire TravelCenters of America Inc. Loudon’s wife worked on the planned deal. Without his wife’s knowledge, Loudon purchased shares of TravelCenters stock before the merger was announced on February 16, 2023. As a result of the announcement, TravelCenters’s stock rose nearly 71 percent and Loudon allegedly immediately sold all his TravelCenters shares for a profit of $1.8 million.

The SEC alleged that “Mr. Loudon took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential.” Loudon’s wife reported his dealings to her bosses at BP, who promptly fired her despite having no evidence of her knowing involvement in the scheme. Unsurprisingly, she has since filed for divorce.

The SEC’s complaint, filed in U.S. District Court for the Southern District of Texas, charges Loudon with violating the antifraud provisions of the federal securities laws. Loudon has consented to the entry of a bifurcated settlement, meaning a partial judgment leaving only the question of how much disgorgement and civil penalty he will have to pay.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Texas announced it has brought criminal charges against Loudon.

Alejandro Soto is a former senior official with the SEC and leads Fridman Fels & Soto, PLLC’s Securities Litigation and SEC Enforcement Practice Group. Alex routinely represents individuals and entities targeted and charged in parallel investigations—those brought by more than one law enforcement and regulatory agency against the same individual or entity for the same alleged conduct—having handled such investigations and lectured on the topic on numerous occasions.