A man in Texas has pleaded guilty to securities fraud after making $1.7 million in “illegal profits” after listening in on his wife’s conversations about an upcoming company acquisition while she was working remotely for oil and gas company BP, according to a press release from the U.S. Attorney's Office for the Southern District of Texas.
On Feb. 22, the U.S. Securities and Exchange Commission announced that it had charged Tyler Loudon for “violating the antifraud provisions of the federal securities laws” after he overheard his wife, who was an associate manager in mergers and acquisitions at BP, discuss the company’s upcoming acquisition of truck stop company TravelCenters during several meetings, which led him to purchase 46,450 shares of TravelCenters’ stock before the move was announced.
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Once the acquisition was officially made public on Feb. 16, TravelCenters' stock skyrocketed by about 71%, and Louden allegedly immediately sold his recently purchased shares of the company for a whopping $1.76 million.
“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 Regional Office, in a press release. “The SEC remains committed to prosecuting such malfeasance.”
Loudon pleaded guilty shortly after the charges were filed against him, and he took a plea deal where he agreed to “forfeit” the $1.7 million, according to the U.S. Attorney’s Office for the Southern District of Texas. He also has a sentencing date set for May 17 where he could face up to five years in federal prison and could be fined a maximum of $250,000.
BP’s acquisition of TravelCenters is a move that is worth $1.3 billion and one that is expected to grow BP’s earnings by around $800 million by 2025. The acquisition is also expected to add a network of about 280 travel centers on major highways across the U.S.
As remote work is becoming a permanent and beloved part of workplace culture, the security of company information has been a growing concern for some organizations that have remote workers.
According to a recent study by Fortinet, 62% of organizations who offer remote work options suffered data breaches that they said could have been prevented if employees came into the office. Also, 30% of organizations in the study listed employees not following security protocols at home as one of the two biggest security risks of working from home.
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