Houston Insider Trader Gets 2 Years for $1.7M Scheme

A Houston man has been sentenced to two years in federal prison for running a $1.7 million insider trading scheme using his wife’s private company information.

Tyler Loudon, 42, pleaded guilty to securities fraud on February 22, and was handed down a 24-month sentence by U.S. District Judge Sim Lake.

Loudon used his wife’s position as an associate manager in mergers and acquisitions at an international oil and gas company to learn about a planned acquisition.

He then used the non-public information to purchase 46,450 shares of the target company’s stock, and sold them for a substantial profit after the acquisition was announced, netting $1.7 million in the process.

“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 U.S. Attorney Alamdar S. 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.”

Loudon’s wife was unaware of her husband’s actions, and the FBI conducted an 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.

Loudon will self-surrender to a Bureau of Prisons facility to be determined in the near future, and has already forfeited the $1.7 million in illegal proceeds to the United States.

The case serves as a warning to those who would take advantage of their access to confidential insider information to personally profit.