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| 1 minute read

The Price of Not Keeping Your Home Office Private? Maybe Divorce and a Visit from the Feds.

A man in Texas was indicted by the Securities and Exchange Commission ("SEC") for insider trading after he overheard his wife's work calls and made trades based on his eavesdropping. His wife filed for divorce, and he now faces up to $250,000 in fines and 5 years in federal prison.

Tyler Loudon overheard his wife, who worked for BP, discussing a future acquisition. Both spouses shared a home office space in which they were within 20 feet of each other. Mr. Loudon slowly started selling investments to buy stock in the to-be-acquired company, all unbeknownst to his wife. When the transaction came to light after the acquisition took place, Mr. Loudon revealed to his wife what he had done. She informed her supervisor at BP, and ultimately lost her job.  She then filed for divorce.

Mr. Loudon pleaded guilty and came to an agreement with the SEC which includes handing over his $1,763,522 profit to the federal government.  The U.S. Attorney's Office for the Southern District of Texas is now also filing criminal charges.

The Takeaways for Employers and Employees

This is, admittedly, a rather extreme example: the spouse in this case appears to have had no idea that her husband would engage in insider trading and use her employer's confidential information in this way.

Nevertheless, it's worth reminding yourself that, just because you work from home, it does not mean that confidentiality (or federal securities laws) should be taken any less seriously than if you go to a physical office building.  Employees should ensure that they have proper measures in place to protect the confidentiality of their employer's information. Employers should ensure that they communicate clear remote working policies to their staff. 




Federal prosecutors said that Mr. Loudon either knew, or was “severely reckless in not knowing,” that information he overheard or was told about BP deals was confidential.


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