• Texas resident Tyler Loudon was sentenced to two years in prison for securities fraud related to insider trading on shares of TravelCenters of America.
• Loudon bought that stock after hearing his wife, then a mergers and acquisitions manager at oil giant BP, on work calls discuss BP's planned purchase of the company.
• He agreed to forfeit the more than $1.7 million in profit he made from TravelCenters shares after their price soared when the deal was announced.

The ex-husband of a former BP mergers and acquisitions manager was sentenced to two years in federal prison for insider trading that netted him $1.76 million after he eavesdropped on her work calls about the oil giant buying another company.

The ex-husband, Tyler Loudon, also was sentenced to one year of supervised release after his prison term and fined $10,000 by U.S. District Court Judge Sim Lake in Houston on Monday.

Loudon's lawyer, Peter Zeidenberg, asked Lake to sentence him to one year of home confinement followed by two years of supervised release, citing, among other reasons, the need to care for Loudon's ailing mother.

The prison sentence was at the bottom end of the 24-to-30-month range requested by federal prosecutors.

Loudon, as part of his guilty plea to a charge of securities fraud in February, already had agreed to forfeit the illicit profit he made in February 2023 from selling off the nearly 46,500 shares of TravelCenters of America after that company's stock price soared more than 70% on news it was being acquired by BP for about $1.3 billion.

The 42-year-old Houston resident, who was an engineer for an oil and gas company, bought TravelCenters shares for about $2 million over several months beginning in December 2022.

His purchases started after he secretly listened to his wife's work calls about BP buying TravelCenters and later discussed the deal with her in "normal" married-couple kinds of conversations, according to court records.

Loudon's eavesdropping occurred when he and his wife were working remotely "in close quarters" to one another due to the Covid-19 pandemic at the time, records show.

"Racked with guilt and fear," Loudon "confessed to his wife" what he had done in March 2023 after learning that the Financial Industry Regulatory Authority had asked BP for a list of people "in the know" about the TravelCenters deal before it was finalized, according to court filings.

Loudon's wife, who was not accused of wrongdoing, reported his actions to her BP supervisor, but she ended up getting fired later, court records show. She also divorced Loudon.

A sentencing memo filed last week by Loudon's attorney says that at the time he bought the TravelCenters, Loudon was a "frequent day-trader of stocks" whose "marriage was under a great deal of stress as a result of multiple relocations and job changes" for both him and his wife.

"Mr. Loudon began to fear that his marriage was in jeopardy, an event that was particularly freighted in his mind due to the divorce he experienced as a child," the memo said.

"In a wholly misguided belief that money could somehow help address the marital stresses the couple was experiencing, Mr. Loudon made the fateful decision to betray his wife's trust, as well as his own better judgment," the memo said.

"Tyler deeply regrets his conduct, has taken responsibility for it, and looks forward to putting this behind him and moving on with his life," Zeidenberg told CNBC on Wednesday.

Zeidenberg, in his sentencing memo, noted Loudon had lost his job and his marriage as a result of his actions, and because "of this conviction, [he] has little realistic hope for future employment in his field of engineering, and his future job prospects are extremely bleak."

"Regardless of the sentence the Court imposes, Mr. Loudon will be paying the price for his colossally bad judgment for the rest of his life," Zeidenberg wrote.

"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 Houston U.S. Attorney Alamdar Hamdani, in a statement.

"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," Hamdani said. "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."

In his sentencing memo, Loudon's lawyer argued that insider trading cases involving spouses in which no one else other than a spouse is tipped off to nonpublic information are often not charged criminally.

"Indeed, civil, non-criminal dispositions are the typical fashion in which these types of cases are handled," the memo said, pointing to nine Securities and Exchange Commission lawsuits.

"Most, if not all, insider-trading cases involving spouses that have resulted in criminal prosecutions typically have involved aggravating facts not present here," Zeidenberg wrote.

Loudon faces a separate civil lawsuit by the SEC related to his insider trading. That civil case, like his criminal case, is being overseen by Lake.

Lake, on May 3, ordered the SEC lawyers and Zeidenberg to either agree to a final judgment in that case or submit a schedule for briefing on the agency's request for monetary relief within 30 days.