Houstonian heads to prison in $1.7M insider trading scheme using wife’s private company information

HOUSTON – A 42-year-old man has been sentenced for securities fraud, announced U.S. Attorney Alamdar S. Hamdani.

Tyler Loudon pleaded guilty Feb. 22.

U.S. District Judge Sim Lake has now ordered Loudon to serve 24 months in federal prison to be immediately followed by one year of supervised release. In handing down the sentence, Judge Lake noted a significant sentence of incarceration was required to reflect the seriousness of the offense, promote respect for the law and afford adequate deterrence to this type of criminal conduct.

“Insider trading is rampant, extremely difficult to uncover and adversely affects the integrity of the financial markets and the public perception of the markets,” said Hamdani. “These types of offenses erode the public’s confidence in the integrity of the markets and lead to widespread cynicism that the markets are rigged in favor of a fortunate few. Mr. Loudon was only able to commit this crime because he had an unfair advantage: his spouse was an insider who gave him material nonpublic information. This sentence sends a clear message to those who would take advantage of their access to confidential insider information to personally profit are not above the law.”

“Mr. Loudon took advantage of his and his wife’s ‘work from home’ situation and betrayed his spouse by eavesdropping on her confidential business calls to realize a profit of $1.7M in less than two months,” said Special Agent in Charge Douglas Williams of the FBI Houston field office. “Insider trading cases like this one cause damage to everyday investors, our economy and the public’s trust in the fairness of our financial markets. Fair trading laws and regulations are in place so that anyone who can, and wants to, participate in the stock market does, but on an equal playing field.”

Loudon made $1.7 million in illegal profits from the purchase and sale of stock market shares.

Loudon’s wife was an associate manager in mergers and acquisitions at international oil and gas company. Loudon learned her company was planning to purchase a travel center operator business.  

Unbeknownst to his spouse, Loudon used the non-public information about the expected acquisition to purchase 46,450 shares ahead of the public notice.

After the announcement, the travel center’s stock price increased. Loudon then sold his shares for a substantial profit.

Prior to sentencing, Loudon forfeited the $1.7 million in illegal proceeds to the United States.

Loudon will self-surrender to a Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation with the assistance of the Securities and Exchange Commission and the Financial Industry Regulatory Authority. Assistant U.S. Attorney Karen M. Lansden prosecuted the case.