A former pharmaceutical executive and his cousin were charged on Thursday with insider trading in Eastman Kodak Co stock based on tips that the company was lining up a $765 million loan early in the Covid-19 pandemic to make pharmaceuticals.
Prosecutors said the executive, Andrew Stiles, had been employed with a company that was working with Kodak to obtain the federal loan, and passed material nonpublic information about its progress to his cousin Gray Stiles.
Kodak shares last traded at $2.62 before the planned loan from the U.S. International Development Finance Corp, or DFC, was announced on July 28, 2020.
The share price ballooned as high as $60 within two days, reflecting investors’ surprise as the Rochester, New York-based company, known for cameras and film, sought to remake itself.
According to the indictment, the defendants’ illegal trading in Kodak stock resulted in profits of more than $500,000 for Andrew Stiles and more than $700,000 for Gray Stiles.
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