Remote working has spawned a case of illegal insider trading.
The U.S. Securities and Exchange Commission (SEC) alleged that Tyler Loudon — whose wife worked as a mergers and acquisitions manager for London-based energy giant, BP plc — traded ahead of BP’s planned acquisition of TravelCenters of America Inc., a U.S.-based truck stop and travel company, which was announced in early 2023.
The regulator alleged that Loudon overheard several of his wife’s work-related conversations about the pending merger while she was working remotely.
Armed with that inside information, the SEC said Loudon purchased 46,450 shares of TravelCenters stock without his wife’s knowledge, and turned a US$1.76-million profit when he sold those shares after the stock jumped nearly 71% on news of the deal.
“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 office, in a release.
Without denying the allegations in the SEC’s complaint, Loudon consented to the entry of a partial judgment that permanently enjoined him from violating federal securities laws, imposed an officer and director ban, and ordered him to pay disgorgement with prejudgment interest and a civil penalty. The sanctions amounts are to be determined by a court, which must approve the settlement.
In a parallel criminal action, Loudon also pled guilty to securities fraud, the U.S. attorney’s office for the Southern District of Texas announced.
As part of his plea agreement, Loudon agreed to forfeit his illegal trading profits. He is scheduled to be sentenced by the judge in that proceeding on May 17.