In a dramatic turn of events, two former executives have pleaded guilty to insider trading following a nearly year-long investigation into their use of confidential information about Eastman Kodak Co. to make over $1 million in illegal profits. The hearing took place in U.S. District Court in Manhattan, where the securities fraud case was filed against cousins James A. “Andrew” Stiles of the Lowcountry and Edward G. “Gray” Stiles of Richmond, Va., in February 2023.
According to prosecutors, the duo misappropriated sensitive information about potential government loans being made to Eastman Kodak Company to finance the production of Covid-19-related pharmaceutical components. The scheme began almost four years ago when Andrew Stiles, who was just 38 at the time, was a newly hired executive at drug manufacturer Phlow Corp., which was collaborating with Eastman Kodak on the pandemic-era project and assisting the company in applying for a large government loan that was made public on July 27, 2020.
In the days that followed the announcement of the loan, Kodak stock experienced a significant rise, jumping from around $5 per share prior to the news to more than $140 per share by day’s end – an increase of over 2,500 percent! In the weeks leading up to the public announcement of the loan, Andrew shared confidential information about financing status with his cousin Gray Stiles (who was then 39 years old), who used this information to purchase approximately 130,000 shares of Eastman Kodak stock between June and August 2020.
The two men sold all their shares within weeks after making their trades – just as news broke about Eastman Kodak’s successful application for federal aid – making a combined profit of over $1 million from their illegal activities according to Damian Williams, U.S Attorney for Southern District of New York’s office statement.
