June 20, 2024
Former Pharma Executive And Cousin Charged With Insider Trading Of Kodak Stock
Former Pharma Executive And Cousin Charged With Insider Trading Of Kodak StockDamian Williams, the United States Attorney for the Southern District of New York, and Michael...

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging JAMES ANDREW STILES, a/k/a “Andrew Stiles,” and EDWARD GRAY STILES, a/k/a “Gray Stiles,” with multiple counts of securities fraud and conspiracy to commit both wire fraud and securities fraud in connection with a scheme to commit insider trading based on misappropriated information about potential government loans to be made to the Eastman Kodak Company to finance the production of COVID-19-releated pharmaceutical components.  ANDREW STILES was arrested this morning in South Carolina, and GRAY STILES was arrested this morning in Virginia.

U.S. Attorney Damian Williams said: “By stealing confidential business information, Andrew Stiles allegedly betrayed the trust and confidence of his employer — a pharmaceutical company working to help the public at the height of the COVID-19 pandemic — and schemed with his cousin, Gray Stiles, to collectively make more than a million dollars of illegal profits.  Today’s arrests show that this Office will continue to prosecute those who seek to profit at the expense of the integrity and fairness of our financial markets.”

FBI Assistant Director Michael J. Driscoll said: “As alleged, the defendants are the latest examples of criminal actors relying on material non-public information to trade securities for their own profit.  When individuals motivated by greed illegally tip the scales in their favor, public confidence in the integrity of our financial markets is eroded.  Investigating and holding accountable the perpetrators of these schemes remains a priority for the FBI.”

According to the allegations in the Indictment unsealed in Manhattan federal court:[1]

Between June and July 2020, ANDREW STILES conducted an insider trading scheme in which he misappropriated material, non-public information (“MNPI”) and used it to trade in the stock of the Eastman Kodak Company (“Kodak”) and further provided that MNPI to his cousin, GRAY STILES, so that GRAY would likewise trade on the MNPI.

During that time, ANDREW STILES was an executive at a company (“Company-1”) that was working with Kodak to collaborate on the production of chemicals for pharmaceutical manufacturing in connection with the COVID-19 pandemic.  Company-1 was also assisting Kodak in its application for a significant government loan, which ultimately resulted in the news, on July 27, 2020, of a government “letter of interest” to provide Kodak with a loan of $765 million (the “LOI”).  In the following days, Kodak stock rose substantially, at one point increasing to more than 2,500% above the closing price prior to the news of the LOI.

During June and July 2020, ANDREW STILES was kept apprised of Kodak’s efforts to obtain the government loan, and he both traded using that non-public information and passed that information to GRAY STILES.  For example, on July 9, 2020, when Kodak had applied for a loan in the amount of $655 million, ANDREW STILES and GRAY STILES exchanged the following coded text messages:

GRAY:           Any update on the film we sent off a few weeks ago to get developed

ANDREW:     600+.  Maybe 2 weeks out

GRAY:            I can live with that hahaha

Between June 2020, after ANDREW STILES learned about the potential loan to Kodak, and July 27, 2020, the date the LOI was first publicized, ANDREW STILES purchased more than 90,000 shares of Kodak stock, including multiple purchases the day before the LOI was scheduled to be announced.  GRAY STILES purchased more than 30,000 shares, more than half of which were purchased the day prior to the scheduled announcement of the LOI.  In fact, on July 27, 2020, ANDREW STILES texted GRAY STILES, “Tmw,” indicating the expected date of the announcement.  Less than one minute later, GRAY STILES responded, “Hot damn.”  Following that exchange, and before the news was announced, ANDREW and GRAY STILES each purchased more than 10,000 additional shares. 

ANDREW and GRAY STILES each sold the entirety of their shares in the days and weeks after the announcement.  ANDREW STILES realized profits of more than $500,000; GRAY STILES realized profits of more than $700,000.

*                *                *

ANDREW STILES, 37, of South Carolina, and GRAY STILES, 37, of Virginia, are each charged with three counts of securities fraud, each of which carries a maximum sentence of 20 years in prison, and one count of conspiracy to commit wire fraud and securities fraud, which carries a maximum sentence of five years in prison.

The statutory maximum penalties in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding work of the FBI.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Alex Rossmiller, Nicolas Roos, and Allison Nichols are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.


[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth in this release constitute only allegations, and every fact described should be treated as an allegation.

Originally published at https://www.fbi.gov/contact-us/field-offices/newyork/news/former-pharma-executive-and-cousin-charged-with-insider-trading-of-kodak-stock

originally published at HUMAN RIGHTS - USA DAILY NEWS 24