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Knowing this information, Loudon purchased tens of thousands of shares of TravelCenters of America stock, officials alleged. When the deal was announced in February 2023, Loudon liquidated his shares to make $1.76 million, authorities said.
On Thursday, federal prosecutors announced that Loudon, 41, had pleaded guilty to securities fraud. Loudon, who faces up to five years in prison, will forfeit the $1.76 million he earned from the confidential information, authorities said.
Peter Zeidenberg, Loudon’s attorney, told the Washington Post that his client “made a terrible error in judgment, is very sorry, and has taken responsibility for it.”
A BP spokesman declined to comment.
Loudon’s wife, who was a mergers and acquisitions manager at BP, did not know that Loudon had relied on her employment information to buy shares, according to a complaint the Securities and Exchange Commission filed against Loudon on Thursday in District Court. of the United States for the Southern District of Texas.
The SEC’s complaint arises from a separate civil case against Loudon, who recently agreed to a partial trial with the federal government agency.
“Mr. Loudon took advantage of his remote work conditions and his wife’s trust to exploit information he knew was confidential,” said SEC Regional Director Eric Werner. said in a statement. “The SEC remains committed to prosecuting such irregularities.”
The incident occurred in the wake of the coronavirus pandemic, when many employees continued to work from home. Managers and employees have debated the productivity of remote work in recent years, but Loudon’s case sheds light on the risks of discussing sensitive information around family and friends outside the office.
Near the beginning of 2022, BP asked Loudon’s wife to help it with the possible acquisition of TravelCenters of America, a truck stop and travel center operator based in Westlake, Ohio, and told her that information about The dealings were confidential, according to the SEC complaint.
Throughout that year, Loudon and his wife often worked in home offices less than 20 feet away from each other and could hear each other’s arguments, according to the complaint. In December 2022, the couple traveled to Rome, where Loudon’s wife regularly worked on the acquisition and discussed the deal while Loudon sat nearby, a habit that continued after they returned to the United States and until the announcement of the acquisition. , according to the complaint.
Loudon’s wife also acknowledged to investigators that she discussed aspects of the acquisition with Loudon “during the normal course of marital communications,” according to the complaint.
“Loudon knew, or was grossly reckless in not knowing,” the complaint adds, “that information about potential deals with BP, including the acquisition (of TravelCenters of America), was material, non-public information that it had a duty to keep confidential. “.
In December 2022, the same month BP offered to acquire TravelCenters of America, Loudon began purchasing shares of the travel center operator and ultimately raised 46,450 shares, according to the complaint.
On February 16, 2023, BP announced had acquired TravelCenters of America, boosting the travel center operator’s stock by nearly 71 percent, prosecutors said. That day, Loudon sold all of his shares to make $1.76 million, authorities said.
In March 2023, the Financial Industry Regulatory Authority asked BP for the names of people who had prior knowledge of the acquisition, according to the complaint. Loudon’s wife told her husband that a former BP employee who had worked on the deal complained to her that the company’s lawyers were asking for personal information. Loudon asked his wife if they would be investigated; she said they would, according to the complaint.
The following month, Loudon confessed to his wife that he had purchased stock in TravelCenters of America before the acquisition was announced, the complaint alleges. He told her that he “wanted to earn enough money so that she no longer had to work long hours,” according to the complaint.
Loudon’s wife, who was “stunned,” according to the complaint, told her supervisor about Loudon’s business dealings, prompting the company to place her on administrative leave. BP, which reviewed her emails and text messages, found no evidence that Loudon’s wife knowingly leaked information but still fired her, the complaint alleges.
Loudon’s wife moved away and stopped talking to her husband, according to the complaint. Although Loudon apologized to her in a handwritten letter, his wife began divorce proceedings in June, according to the complaint.
Federal prosecutors filed criminal charges against Loudon on February 6.
In addition to losing the money he earned in illegal trading, Loudon could face a fine of $250,000, prosecutors said. His sentencing is scheduled for May.