The ex-husband of a former Blood pressure Mergers and acquisitions manager was sentenced to two years in federal prison for insider trading, which earned him $1.76 million after he interrupted their work discussions concerning the Oil giant buys one other company.
Ex-husband Tyler Loudon was also sentenced to at least one yr of supervised release and a $10,000 positive following his prison sentence US District Judge Sim Lake in Houston On Monday.
Loudon's attorney, Peter Zeidenberg, asked that Lake be sentenced to at least one yr of house arrest followed by two years of probation. One reason he gave was that he needed to deal with Loudon's sick mother.
The prison sentence was on the lower end of the range of 24 to 30 months demanded by the Federal Prosecutor's Office.
Loudon, as a part of his guilty plea to at least one count of Securities fraud had already agreed in February to forgo the illegal profit he made in February 2023 by selling nearly 46,500 shares of TravelCenters of America after the corporate's stock price rose greater than 70% when it was announced that it’s going to be acquired by BP for roughly $1.3 billion.
The 42-year-old Houston resident, who worked as 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 phone conversations about BP's acquisition of TravelCenters and later discussed the deal along with her in “normal” married couple conversations, court records show.
Loudon's wiretapping occurred while he and his wife were working remotely “in close quarters” resulting from the Covid-19 pandemic on 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 an inventory of individuals “informed” concerning the TravelCenters deal. were accomplished before it was accomplished, in keeping with court documents.
Loudon's wife, who was not accused of wrongdoing, reported his behavior 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 on 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.” . each for him and his wife.
“Mr. Loudon began to fear that his marriage was in jeopardy, an event that particularly distressed him because of the divorce he had 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.
Zeidenberg stated in his sentencing memorandum that Loudon had lost his job and his marriage due to his actions, and since of “this conviction, [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 colossal miscarriage of justice 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 an announcement.
“Offenses of this nature undermine public confidence in the integrity of markets and lead to widespread cynicism that markets are being manipulated to benefit 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 important, non-public information.”
In his sentencing memorandum, Loudon's attorney argued that spousal insider trading cases, where nobody aside from the spouse is tipped off about nonpublic information, often go unprosecuted.
“In fact, such cases are typically handled at the civil rather than criminal level,” the memo says, citing nine lawsuits filed with the U.S. 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 brought by the SEC in connection along with his insider trading. That civil case, in addition to his criminal case, is being overseen by Lake.
Lake ordered on May 3 that attorneys for the SEC and Zeidenberg within the case must either comply with a final judgment or provide a schedule for briefing the agency's request for monetary compensation inside 30 days.
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