Cousins from South Carolina and Virginia plead guilty in trading scam


Cousins from South Carolina and Virginia plead guilty in trading scam

A former Charleston pharmaceutical executive and a relative have pleaded guilty to insider trading, more than a year after being charged with using 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 in February 2023 against cousins James A. “Andrew” Stiles of the Lowcountry and Edward G. “Gray” Stiles of Richmond, Va.

According to prosecutors, the duo misappropriated 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 38 years old at the time, was a newly hired executive at drug manufacturer Phlow Corp. Phlow Corp. was collaborating with Eastman Kodak on the pandemic-era project and was also assisting Eastman Kodak in applying for a large government loan that was made public on July 27, 2020, when a $765 million “letter of interest” was announced.

In the days that followed the announcement of the loan, Kodak stock experienced a significant rise, increasing to more than 2,500 percent above the closing price prior to the news. In the weeks leading up to the public announcement of the loan, Stiles shared confidential information about the financing status with his 39-year-old Virginia cousin. The cousins bought approximately 130,000 shares of Eastman Kodak between June 2020 and the day the financing letter was made public. They sold all the stock within weeks of the announcement, making a combined $1.2 million from the trades, according to a statement from Damian Williams, the U.S. Attorney for the Southern District of New York.

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