Charges filed against Andrew Stiles for engaging in insider trading in the stocks of Eastman Kodak Company and Novavax Inc.
At the height of the COVID-19 pandemic, the Securities and Exchange Commission filed charges against Andrew Stiles for engaging in insider trading in the stocks of Eastman Kodak Company and Novavax Inc. The charges are based on nonpublic information related to both companies’ planned government partnerships to assist in the fight against COVID-19.
Gray Stiles, Andrew Stiles’ cousin who lives in Richmond, Virginia, was also charged with insider trading in Kodak stock by the SEC. This activity resulted in more than $1.5 million in illegal profits for Gray and Andrew Stiles.
The complaint filed by the SEC alleges that Andrew Stiles, a resident of Charleston, South Carolina, 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 through his employment at a medicine supply chain company. The complaint also alleges that Stiles was aware of Kodak’s efforts to obtain the loan.
According to this material nonpublic information, Andrew Stiles allegedly made a purchase of more than 95,000 shares of Kodak stock prior to the public announcement in July 2020 and tipped his cousin, Gray Stiles, who made a purchase of more than 45,000 shares. Both of these transactions occurred before the public announcement. Following the release of the news, Andrew Stiles and his brother Gray Stiles liquidated their Kodak shares, resulting in total profits of over $1.5 million.
The Commission further alleges that months earlier, when Andrew Stiles was working as a consultant for the pharmaceutical company Novavax, he 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. The information in question was allegedly about the company’s efforts to secure funding to develop the vaccine. Illicit profits of more than $45,000 were made by Stiles as a result of his trading.
According to Joseph G. Sansone, Chief of the Market Abuse Unit in the SEC Enforcement Division, “During a time of great turmoil, it is alleged that Andrew Stiles repeatedly abused his position as a government contract consultant to generate illegal trading profits.
This statement was made by the SEC Enforcement Division. The SEC remains committed to uncovering and prosecuting those who would attempt to enrich themselves by trading on confidential information about governmental activities,” the SEC said in a statement.
In a separate but related action, the United States. Criminal charges have been brought against Andrew Stiles and Gray Stiles, according to an announcement made today by the Attorney’s Office for the Southern District of New York.
The complaint filed by the SEC alleges that Andrew Stiles and Gray Stiles violated the antifraud provisions of the securities laws. The SEC also seeks a permanent injunction, disgorgement, and a civil penalty against Andrew Stiles, in addition to a bar on his ability to serve as an officer or director in the future.
Megan Ryan, a member of the SEC’s Market Abuse Unit, was the one in charge of conducting the investigation. Both Assunta Vivolo and Mr. Sansone were in charge of supervising it. Judson Mihok and Gregory Bockin, both of the Philadelphia Regional Office, will serve as the primary litigators in this case.
The SEC is grateful to the United States for its assistance. the United States Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority are all currently investigating the matter.
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