25 February 2024 , 14:49
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A man who made almost $1.8 million (£1.42m) in illegal profits after listening in on his executive wife's phone calls has been charged with insider trading - and was served divorce papers weeks later.
Tyler Loudon, a 42-year-old from Houston, Texas discovered evesdropping on private conversations can be costly after he overheard parter Emily Kraus - a mergers and acquisitions manager at BP - conducting internal discussions over the telephone whilst working from home.
He pleaded guilty to securities fraud for buying and selling stocks based on details gleaned from his wife's business conversations while both were at their property. Armed with crucial information, the energy engineer purchase thousand of shares of TravelCenters stock without her knowledge. He made the purchase before the deal was made public in February 2023.
He made huge profits from the deal, but has agreed to forfeit those gains. She discovered what he had done, she informed her bosses at BP. She was sacked despite finding she had not acted improperly and she later filed for divorce.
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Emily Kraus worked for BP in Houston, Texas before being sacked after her husband's actions (AFP/Getty Images)"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 said in a criminal complaint. Mirror Online have approached BP for comment.
Since the work-from-home trend began at the start of the pandemic, the SEC has brought a number of insider-trading cases after partners or spouses overhearding confidential information. According to the regulator's complaint, his wife moved out of the house and ceased all contact with him in June.
When Loudon overheard details of a BP plan to acquire a truck stop and travel center company based in Ohio, he smelled profit. He bought more than 46,000 shares of the truck stop company before the merger was announced a year ago, at which point the stock soared almost 71 per cent, according to the Securities and Exchange Commission.
Loudon then allegedly sold the stock immediately for a gain of $1.76 million. His spouse was unaware of his activity, according to the U.S. Attorney's Office for the Southern District of Texas. He was also accused of listening in on his wife's calls during a trip to Rome, Italy.
Loudon will be sentenced on May 17, when he faces up to five years in federal prison and a possible fine of up to $250,000, according to the U.S. attorney's office. He may also owe a fine in addition to other penalties in order to resolve a separate and still pending civil case brought by the SEC.