We’ve seen many insider trading cases involving friends, spouses, domestic partners, and dates. We can guess what the end result would be. I think the Tyler Loudon case is the first one that has taken us all the way to the end.
Tyler and Mrs. Loudon lived in Houston. Mrs. Loudon worked as a mergers and acquisitions manager at BP p.l.c., the big energy company. As many couples did during the pandemic, they worked in home offices and in relatively close proximity to each other. Mrs. Loudon was working on BP’s acquisition of TravelCenters of America.
Apparently, Mrs. Loudon shared some of the acquisition information with Tyler. Of course, she expected that he would not do something stupid with the information.
He did. He did do something stupid.
Tyler bought shares in TravelCenters. That alone of course is illegal. Then he took the stupidity to a higher level. He sold all of his other positions in his brokerage account and Roth IRA and put all of that money into purchasing TravelCenters shares. I’m sure that was flagged by his brokerage firm as suspicious activity.
FINRA opened an investigation. Tyler confessed to his wife. Mrs. Loudon told her BP supervisor about he husband’s trading. BP fired Mrs. Loudon. Mrs. Loudon moved out of the marital home and filed for divorce.
We generally assume that a violation of spousal secrets to do stupid insider trading is going to lead to relationship issues. This is the first SEC complaint I remember that has take us all the way to the end of the marriage.
Besides divorce, Tyler is also facing up to five years in prison and a $250,000 fine with the Department of Justice and possible more in SEC fines. Of course, Tyler also had to forfeit all of the trading profits.
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