In a case that could trigger debates against working from home, US regulators alleged that a man made $1.8 million (£1.4 million) by trading on confidential information while eavesdropping on his wife's remote call.
As reported by The Guardian, the Securities and Exchange Commission (SEC) said it charged Tyler Loudon with insider trading after he "took advantage of his remote working conditions" and profited from private information related to the oil firm BP's plans to buy an Ohio-based travel center and truck-stop business last year.
According to the SEC-- Loudon, based in Houston, Texas, intercepted several remote calls led by his wife, a BP merger and acquisitions manager involved in a planned deal from a home office merely 20ft (6 meters) away.
The regulatory authority reported that Loudon went on a purchasing spree, buying over 46,000 shares in the takeover target, TravelCenters of America, without his wife's knowledge, and occurred weeks before the deal was made official on February 16, 2023.
Following the announcement, TravelCenters's stock witnessed a remarkable increase of nearly 71%. Subsequently, Loudon liquidated all his shares, generating a profit of $1.8 million.
Legal Proceedings:
Mr. Loudon admitted to his wife about purchasing TravelCenters shares after the Financial Industry Regulatory Authority followed inquiries about the BP deal and those privy to the information, said BBC.
He later explained that he bought the stock intending to make "enough money so that his wife wouldn't have to work long hours anymore."
In June, she initiated divorce proceedings and moved out of their home, ceasing all contact.
His wife was apparently "stunned by this confession" and reported the trading to her supervisor at BP.
Her email and texts, reviewed by BP, found no evidence that she knowingly leaked the information about the deal to her husband or knew he had bought the shares. Nonethless, BP terminated her employment.
Mr. Loudon did not deny the allegations and agreed to pay a penalty, said the SEC in a statement.
Loudon also faces potential criminal charges. Should he be convicted, he faces a prison sentence.
With working from home now a regular part of many organizations, the FCA highlights the ongoing importance of 'effective surveillance at all times.'
