ROCHESTER, N.Y. (WROC) — A former pharmaceutical executive and his cousin were arrested and charged with insider trading related to Kodak, according to the U.S. Attorney’s Office.

The investigation found no wrongdoing by Kodak officials.

This dates back to a big announcement in July of 2020, between Kodak and the Trump administration. The company was working to secure a $765 million dollar federal loan to start making drug ingredients.

“This is going to be one of the greatest second acts in American industrial history,” said Dr. Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy at the White House, at the time.

Excitement for the project that was going to create hundreds of local jobs ground to a halt quickly after unusual stock market activity.

The allegations say that between June and July 2020, 37-year-old Andrew Stiles, at the time a vice president of a pharmaceutical company working with Kodak, schemed to share non-public information to trade in the stock of Eastman Kodak Company.

Stiles’ company, according to reports, was working with Kodak during the COVID-19 pandemic. The company was also helping Kodak apply for a $765 million government loan to launch Kodak Pharmaceuticals.

The report also alleges that he provided the information to his cousin, 37-year-old Gray Stiles, so he can also trade on the information. Andrew allegedly purchased over 90,000 shares of Kodak stock while Gray Stiles allegedly purchased over 30,000.

The cousins then sold the entirety of their respective shares after the announcement of the loan, with Andrew profiting over $500,000 and Gray profiting over $700,000, according to the allegations.

On August 8, 2020, it was announced that the loan was put on hold as the federal government conducted an investigation into insider trading, which caused Kodak’s shares to drop to nearly 28%. Kodak Pharmaceuticals was put on hold.

The cousins were arrested on Thursday morning and charged with three counts of securities fraud and one count of conspiracy to commit wire fraud and security fraud. With both charges combined, the pair face a maximum sentence of 25 years in prison.

Local financial expert breakdown:

George Conboy of Brighton Securities, said the most important part of the story for our region, has to do with no wrongdoings by Kodak.

“At the time the story broke, a lot of people seemed to think that Kodak management was guilty of something,” he said. “The fact is, is that Kodak’s CEO was looked at from every angle, and in every action he took to look at Kodak Stock, he did nothing wrong.”

Kodak officials said “no comment” on Friday.

As for the pharmaceutical deal?

“The unfortunate thing is, even though Kodak is executives are blameless, the publicity from the runup and the fear of insider trading caused the feds to withdraw the loan. It’s truly too bad,” said Conboy.