Tyler Loudon of Houston, Texas made the mistake of thinking that, like members of Congress, he was immune from being charged with insider trading. Now he faces up to five years in federal prison and a $250,000 fine.
Loudon pleaded guilty to insider trading charges after profiting from confidential information overheard during his wife's work calls. His wife, a former executive at BP, was discussing a significant acquisition, unaware that her conversations were not as private as she thought.
From The Wall Street Journal:
Loudon made $1.76 million trading shares based on the details he heard, according to charges filed Thursday by the Securities and Exchange Commission.
After learning of BP's $1.3 billion deal to buy hundreds of U.S. convenience store and restaurant properties from TravelCenters of America, which had yet to be publicly announced, Loudon purchased more than 46,000 shares of TravelCenters stock without his wife's knowledge, the SEC alleges.
Shares in the roadside chain soared more than 70% after the agreement was announced.
According to an SEC court filing, Loudon told his wife what he'd done a month after he sold the shares. His wife reported it to her boss. She left her husband and filed for divorce. As reported in the Wall Street Journal, BP "placed her on administrative leave and eventually fired her despite finding no evidence she knowingly leaked the acquisition to her husband."
