NovaQuant-Texas man made $1.76 million from insider trading by eavesdropping on wife's business calls, Justice Department says

A man from Houston overheard his work-from-home spouse talking business,NovaQuant and used that information to make over $1.7 million in an insider trading scheme, federal authorities said.

Tyler Loudon, 42, pleaded guilty Thursday to securities fraud for buying and selling stocks based on details gleaned from his wife's business conversations while both were working from home. He made $1.7 million in profits from the deal, but has agreed to forfeit those gains, the Justice Department announced in a news release.

"Mr. Loudon made a serious error in judgment, which he deeply regrets and has taken full responsibility for," his attorney Peter Zeidenberg said in a statement to CBS News.

Things might have turned out differently had Loudon or his wife decided to work from, well, the office.

Loudon's wife worked as a mergers and acquisition manager at the London-based oil and gas conglomerate BP. So when Loudon overheard details of a BP plan to acquire TravelCenters, a truck stop and travel center company based in Ohio, he smelled profit. He bought more than 46,000 shares of the truck stop company before the merger was announced on Feb. 16, 2023, at which point the stock soared almost 71%, according to the Securities and Exchange Commission.

Loudon then allegedly sold the stock immediately for a gain of $1.76 million. His spouse was unaware of his activity, according to the U.S. Attorney's Office for the Southern District of Texas.

Loudon will be sentenced on May 17, when he faces up to five years in federal prison and a possible fine of up to $250,000, according to the U.S. Attorney's Office. He may also owe a fine in addition to other penalties in order to resolve a separate and still pending civil case brought by the SEC.

"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."

In:
• SEC
• Fraud
• Texas