A Houston man has been accused of insider trading by the Securities and Exchange Commission after admitting to getting a tip on an upcoming deal by eavesdropping on private phone calls.
The Securities and Exchange Commission (SEC) charged Tyler Loudon with insider trading on February 22 after he admitted to a massive stock purchase that netted a profit of $1.8 million. Loudon’s now ex-wife, a mergers and acquisitions agent with BP Oil, was working remotely when Loudon overheard conversations she was having about the purchase of TravelCenters of America, according to a press release from the SEC.
Loudon then purchased 46,450 shares of TravelCenters of America stock before the public announcement of the purchase by BP on February 16, 2023. The stock value rose nearly 71%, at which point Loudon sold his stock. He made the exchange without his then-wife’s knowledge.
“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. “The SEC remains committed to prosecuting such malfeasance.”
Loudon did not deny the charges and has signed a partial judgment deal requiring him to repay the sum, plus interest, and bars him from certain activities. Separate criminal charges were filed against Loudon by the U.S. Attorney’s Office for the Southern District of Texas.
After her husband admitted to the illegal act, Loudon’s wife subsequently moved out of their home and filed for divorce. She had reported his illegal activity to her employer, who, despite lacking evidence that she participated in the scheme, terminated her employment, according to The Guardian.
The case adds fuel to the fire regarding the pros and cons of remote work. Numerous studies spawned from the unique situation that was created when COVID lockdowns forced more than half of the American workforce to work remotely. Many businesses are still struggling to get employees back into the office.
A report by The New York Times suggests there are some benefits to remote work, allegedly including increased productivity and better opportunities for working mothers. However, other studies indicate unintended consequences, such as increases in housing and rental costs.
A study by the Federal Reserve Bank of San Fransisco in 2022 showed that a big reason for rising housing costs was remote workers leaving more affluent areas for less expensive ones, which, in turn, drove up the costs in those areas.
While Loudon’s case is an outlier in the realm of the consequences of remote work, a recent study reported by Forbes shows that remote workers have more concerns over privacy and cybersecurity than in-office employees.
Lee Hadlington, a cyberpsychology lecturer at Nottingham Trent University, told Forbes that he was not surprised by the elevated privacy concerns of remote workers.
“Let’s not forget, for most individuals in a workplace environment, cyber security is generally a second thought and is usually something that is seen as the responsibility of someone else in the company,” Hadlington said.
