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Department of Justice
U.S. Attorney’s Office
Southern District of New York

--------------------------------------------------------------------------------

FOR IMMEDIATE RELEASE
Thursday, February 23, 2023


FORMER PHARMA EXECUTIVE AND COUSIN CHARGED WITH INSIDER TRADING OF KODAK STOCK

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.

Attachment(s): 
Download U.S._v._Stiles_et_al_Indictment.pdf
Topic(s): 
Securities, Commodities, & Investment Fraud
Component(s): 
USAO - New York, Southern
Contact: 
Nicholas Biase (212) 637-2600
Press Release Number: 
23-072
Updated February 23, 2023

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