SEC Charges Cousins for Insider Trading in Kodak Stock Ahead of Company's Planned Govt. Partnership to Assist in Response to COVID-19
Washington, D.C.--(Newsfile Corp. - February 23, 2023) - The Securities and Exchange Commission today charged Andrew Stiles for insider trading in the stocks of Eastman Kodak Company and Novavax, Inc. based on nonpublic information related to both companies’ planned government partnerships to assist in the fight against COVID-19 at the height of the pandemic. The SEC also charged Andrew Stiles’ cousin, Gray Stiles, of Richmond, Virginia, for insider trading in Kodak stock that netted the two more than $1.5 million in illegal profits.
The SEC’s complaint alleges that Andrew Stiles, of Charleston, South Carolina, through his employment at a medicine supply chain company, learned about Kodak’s efforts to obtain a $765 million loan from the federal government to manufacture chemicals to strengthen the domestic supply chain for a number of pharmaceuticals as part of the response to the COVID-19 pandemic. Based on this material nonpublic information, Andrew Stiles allegedly purchased more than 95,000 shares of Kodak stock ahead of the public announcement in July 2020 and tipped his cousin, Gray Stiles, who purchased more than 45,000 shares. After the announcement, Andrew Stiles and Gray Stiles sold their Kodak shares for more than $1.5 million in total profits. The Commission further alleges that, months earlier, while working as a consultant to the pharmaceutical company Novavax, Andrew Stiles purchased 1,844 shares of Novavax stock based on material nonpublic information about the company’s efforts to secure funding to develop a COVID-19 vaccine. This trading garnered Stiles more than $45,000 in illicit profits.
"During a time of great turmoil, Andrew Stiles is alleged to have repeatedly abused his position as a government contract consultant to generate illegal trading profits," said Joseph G. Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit. "The SEC remains committed to uncovering and prosecuting those who would attempt to enrich themselves by trading on confidential information about governmental activities."
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Andrew Stiles and Gray Stiles.
The SEC’s complaint charges Andrew Stiles and Gray Stiles with violating the antifraud provisions of the securities laws and seeks a permanent injunction, disgorgement, and a civil penalty, as well as an officer and director bar against Andrew Stiles.
The SEC’s investigation was conducted by Megan Ryan of the Market Abuse Unit. It was supervised by Assunta Vivolo and Mr. Sansone. The litigation will be led by Judson Mihok and Gregory Bockin of the Philadelphia Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.