LPT: Don’t Eavesdrop On Your Partner’s WFH Calls and Inside Trade on What You Hear

Yesterday the SEC charged the soon-to-be-ex-husband of a BP mergers and acquisitions manager with insider trading after hubby allegedly listened in on his wife’s work-related convos about a particular acquisition. Ironically, husband Tyler Loudon allegedly hoped that the trading — which ultimately netted him $1.76 million — would give the couple enough money for his wife to pull back from work. We’re using allegedly here in excess to effectively communicate that these are, at this point, strictly accusations from the SEC complaint.

At issue, BP’s acquisition of TravelCenters of America, a truck stop company headquartered in Ohio. The acquisition was announced in February 2023 at which time BP said of the deal:

• Adds a network of around 280 travel centers, strategically-located on major highways across US; complementing bp’s US convenience and mobility business.
• $1.3bn cash acquisition within bp’s $16-18bn frame, with acquisition multiple of around six times based on last 12 months’ TravelCenters EBITDA (4Q21-3Q22)
• Adds EBITDA immediately, expected to grow to around $800m by 2025, underpinned by investment, integration value and synergies.
• Expected to deliver over 15% returns and be accretive to free cash flow per share from 2024.
• Almost doubles bp’s global convenience gross margin.

You can only imagine what the internal calls were like if this is how they spoke of it publicly.

In late 2022, Loudon and his wife stayed at an Airbnb in Rome, Italy during which time wifey was working on the acquisition and regularly discussing it on work calls while hubby was hanging out nearby. On December 27 he started accumulating TA stock.

The SEC alleges Loudon purchased 46,450 shares of TravelCenters stock before the merger was announced on February 16, 2023 without his wife’s knowledge. As a result of the announcement, TravelCenters stock rose nearly 71 percent. Loudon allegedly immediately sold all of his TravelCenters shares for a profit of $1.76 million.

Then FINRA requested a deal chronology from BP including the names of people “in the know” ahead of the transaction. A former BP employee who’d worked on the deal reached out to Loudon’s wife — who remains unnamed throughout the complaint — to complain BP’s lawyers were pestering her for her home address and other personal information. When the wife brought this info to her husband he asked if current employees would receive similar treatment to which she said yes. He confessed to her a week later.

The Guardian has more details from the SEC complaint:

Loudon eventually confessed to his wife, and claimed that he had bought the shares because he wanted to make enough money so that she did not have to work long hours anymore.

She reported his dealings to her bosses at BP, which later fired her despite having no evidence that she knowingly leaked information to her husband. She eventually moved out of the couple’s home and filed for divorce.

“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.”

Full SEC complaint can be found here [PDF].