US regulators have alleged that a man earned $1.8 million by trading on insider information he overheard when his wife was on a remote call. This case may add to the debate against working from home.
Allegations of insider trading have surfaced, sparking debate over the risks of remote work. A man is accused of earning $1.8 million by eavesdropping on his wife's confidential office calls during the work-from-home era.
US regulators have alleged that a man earned $1.8 million by trading on insider information he overheard when his wife was on a remote call. This case may add to the debate against working from home.
The Securities and Exchange Commission (SEC) announced charges against Tyler Loudon for insider trading, alleging that he “took advantage of his remote working conditions” to profit from confidential information regarding oil company BP's acquisition plans involving an Ohio-based travel center and truck-stop business last year.
The SEC alleges that Loudon, residing in Houston, Texas, eavesdropped on multiple remote calls conducted by his wife, who worked as a merger and acquisitions manager for BP and was overseeing the proposed deal from a home office located 20 feet (6 meters) away.
According to the regulator, Loudon engaged in significant buying activity, acquiring over 46,000 shares of the acquisition target, TravelCenters of America, without informing his wife, in the weeks leading up to the announcement of the deal on February 16, 2023. Following the announcement, TravelCenters' stock price surged by nearly 71%. Loudon subsequently sold all of his shares, resulting in a profit of $1.8 million.
Eventually, Loudon admitted to his wife that he had purchased the shares with the intention of generating sufficient funds to alleviate her from working extended hours.
She reported her husband's transactions to her superiors at BP, who subsequently terminated her employment, despite lacking evidence that she had knowingly disclosed information to him. Eventually, she moved out from the couple's residence and filed for divorce.
Eric Werner, the regional director of the SEC's Fort Worth office in Texas, stated, “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. The SEC remains committed to prosecuting such malfeasance.”
Concerns regarding security and confidentiality may overshadow findings indicating significant health advantages of working from home, such as improved dietary habits, reduced stress levels, and lower blood pressure.
Loudon did not contest the allegations detailed in the SEC complaint, filed in the US District Court for the Southern District of Texas. Instead, he consented to a partial judgment, pending court approval. This judgment will prohibit him from assuming leadership positions within companies, require him to reimburse the profits from his trades with interest, and impose an additional fine determined by the court.
Additionally, Loudon faces criminal charges from the US Attorney's Office for the Southern District of Texas.
According to the SEC filing, Loudon, in his early 40s, is employed by an undisclosed publicly traded company but operates outside sectors overseen by the regulator.