After learning this information, Loudon bought tens of thousands of shares of Travel Centers of America, officials alleged. When the deal was announced in February 2023, Loudon liquidated his holdings and made $1.76 million, authorities said.
On Thursday, federal prosecutors announced that Loudon, 41, had pleaded guilty to securities fraud. Loudon faces up to five years in prison and the $1.76 million he earned from his confidential information will be forfeited, authorities said.
Loudon's lawyer, Peter Seidenberg, told the Washington Post that his client “made a terrible error in judgment, deeply regrets it, and takes responsibility for it.”
A BP spokeswoman declined to comment.
Mr. Loudon's wife, who was a mergers and acquisitions manager at BP, did not know that Mr. Loudon was using his employment information to buy stock, the Securities and Exchange Commission said Thursday. Southern District of Texas, according to a complaint filed Thursday against Loudon in U.S. District Court.
The SEC's complaint stems from a separate civil lawsuit against Loudon, in which Loudon recently agreed to a partial judgment with the federal agency.
“Mr. Loudon took advantage of his remote work environment and his wife's trust to profit from information he knew was confidential,” SEC Regional Director Eric Warner said in a statement. “The SEC remains committed to prosecuting this type of misconduct.”
The incident occurred in the wake of the coronavirus pandemic, as many employees continued to work from home. Managers and employees have debated the productivity of remote work in recent years, and Loudon's case highlights the risks of discussing sensitive information outside the office, near family and friends.
The SEC complaint alleges that near the beginning of 2022, BP cooperated with Mr. Loudon's wife about the company's possible acquisition of Travel Centers of America, a truck stop and travel center operator headquartered in Westlake, Ohio. He said he had asked him to do so and told him that information about the transaction was confidential.
Throughout the year, Loudon and his wife often worked in their home offices within 20 feet of each other and could hear each other's conversations, according to the complaint. According to the complaint, the couple traveled to Rome in December 2022, where Mr. Loudon's wife regularly worked on acquisitions and discussed deals while Mr. Loudon sat nearby, a habit he continued back in the United States. This continued even after the acquisition was announced.
Loudon's wife also admitted to investigators that she discussed aspects of the acquisition with Loudon “in the course of normal marital communications,” the complaint said.
“Loudon acted with extreme recklessness in either knowing or not knowing information regarding potential BP transactions, including the acquisition of BP,” the complaint added. [TravelCenters of America]was material non-public information and he had a duty to keep it confidential. ”
According to the complaint, in December 2022 (the same month that BP proposed to acquire Travel Centers of America), Loudon began purchasing stock in the travel center operator, ultimately acquiring 46,450 shares. It is said that he collected them.
On February 16, 2023, BP announced that it had acquired Travel Centers of America, and the travel center operator's stock price rose nearly 71 percent, prosecutors said. That day, Loudon sold all of his stock holdings and made $1.76 million, authorities said.
According to the complaint, in March 2023, the Financial Industry Regulatory Authority asked BP to disclose the names of people who had prior knowledge of the acquisition. Loudon's wife told her husband that a former BP employee who worked on the deal complained that the company's lawyers were demanding personal information, she said. Loudon asked his wife if they would be investigated. She said she would, her complaint states.
The next month, Mr. Loudon confessed to his wife that he had purchased Travel Centers of America stock before the acquisition was announced, the complaint says. According to her complaint, the man told her that “she wanted to make enough money so she didn't have to work long hours anymore.”
Loudon's wife was “stunned” and told her boss about Loudon's transactions, which led to the company placing her on administrative leave, according to the complaint. BP examined Loudon's emails and text messages and found no evidence that Loudon's wife knowingly leaked her information and then fired her, the complaint alleges. .
Loudon's wife moved away and stopped talking to her husband, according to the complaint. Loudon apologized to her in a handwritten letter, but her wife began divorce proceedings for her in June, according to her complaint.
Federal prosecutors filed criminal charges against Loudon on February 6th.
In addition to confiscating the money earned from illegal transactions, Loudon could be fined $250,000, prosecutors said. His sentencing is scheduled for May.
