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The ex-husband of a former B.P The mergers and acquisitions executive was sentenced to two years in prison for insider trading that netted him $1.76 million after he overheard her business calls about the oil giant’s purchase of another company.
Ex-husband Tyler Loudon was also sentenced Monday to one year of supervised release and a $10,000 fine by U.S. District Judge Sim Lake in Houston following his prison sentence.
Loudon’s attorney, Peter Zeidenberg, asked that Lake be sentenced to one year of house arrest followed by two years of supervised release, citing, among other things, the need to care for Loudon’s ailing mother.
The prison sentence was at the lower end of the range of 24 to 30 months requested by the federal prosecutor.
As part of his guilty plea to a securities fraud charge in February, Loudon had already agreed to forgo the illegal profit he made from the sale of TravelCenters of America’s nearly 46,500 shares in February 2023, after that company’s stock price fell by more than 70% was up on news that the company would be acquired by BP for around $1.3 billion.
The 42-year-old Houston resident, who was an engineer at an oil and gas company, bought about $2 million in TravelCenters stock over several months starting in December 2022.
His purchases began after he secretly listened in on his wife’s business calls about BP’s purchase of TravelCenters and later discussed the deal with her in “normal” conversations between married couples, according to court documents.
Loudon’s wiretaps occurred as he and his wife were working remotely “in close quarters” due to the Covid-19 pandemic at the time, records show.
“Riddled with guilt and fear,” Loudon confessed to his wife what he had done in March 2023 after learning that the financial industry regulator had asked BP for a list of people “informed” about the TravelCenters deal. were completed before it was completed, according to court documents.
Loudon’s wife, who was not accused of wrongdoing, reported his actions to her BP supervisor but was later fired, court records show. She also divorced Loudon.
A sentencing memorandum filed last week by Loudon’s attorney said that at the time he bought the TravelCenters, Loudon was a “frequent day trader in stocks” whose “marriage was under great stress due to multiple moves and job changes.” . both for him and his wife.
“Mr. Loudon began to fear that his marriage was in jeopardy, an event particularly prominent in his mind due to the divorce he experienced as a child,” the memo said.
“Under the completely misguided belief that money could somehow help alleviate the couple’s marital stress, Mr. Loudon made the fateful decision to abuse his wife’s trust and his own better judgment,” the memo said.
“Tyler deeply regrets his behavior, has accepted responsibility for it and looks forward to putting this behind him and moving on with his life,” Zeidenberg told CNBC on Wednesday.
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Zeidenberg noted in his sentencing memorandum that Loudon had lost his job and his marriage as a result of his actions and that “because of this belief [he] has little realistic hope of future employment in his engineering field and his future career prospects are extremely bleak.
“Regardless of the sentence the court imposes, Mr. Loudon will pay the price for his colossally poor judgment for the rest of his life,” Zeidenberg wrote.
“Insider trading is widespread, extremely difficult to detect, and harms the integrity of financial markets and the public perception of markets,” Houston U.S. Attorney Alamdar Hamdani said in a statement.
“Such crimes undermine public confidence in the integrity of markets and lead to widespread cynicism that markets are being manipulated in favor of a fortunate few,” Hamdani said. “Mr. Loudon was only able to commit this crime because he had an unfair advantage: his wife was an insider who gave him material, non-public information.”
In his sentencing memorandum, Loudon’s attorney argued that spousal insider trading cases, where no one other than the spouse is tipped off about nonpublic information, often go unprosecuted.
“In fact, civil, not criminal, injunctions are the typical way these types of cases are handled,” the memo said, citing nine lawsuits filed by the Securities and Exchange Commission.
“Most, if not all, insider trading cases involving spouses that have been prosecuted have typically involved aggravating facts that are not present here,” Zeidenberg wrote.
Loudon faces a separate civil lawsuit from the SEC related to his insider trading. This civil case, like his criminal case, is being overseen by Lake.
On May 3, Lake directed SEC attorneys and Zeidenberg to either agree to a final judgment in the case or provide a schedule for briefing on the agency’s request for financial relief within 30 days.
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2024-05-22 21:30:09
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