Kodak's U.S. loan disclosure put under scrutiny
The surprise announcement last week that Eastman Kodak was getting a $765 million government loan to start supplying generic drug components -is now under scrutiny.
The U.S. Securities and Exchange Commission on Tuesday is said to be in the early stages of an investigation into circumstances surrounding trading activity before the announcement, according to a report in the Wall Street Journal.
The news cast a shadow on what had been a meteoric price-surge in the stock last week of more than 1,100 percent. Shares of Kodak tumbled more than 12 percent on Tuesday.
The SEC declined to comment and a representative for Kodak said it intends to fully cooperate with any potential inquiries.
There was heavy trading volume in Kodak one-day before that loan was officially announced, which resulted in a windfall for executives, some of whom received previously undisclosed options the day before the deal with Trump was announced.
Kodak's chairman Jim Continenza was one of those executives. He received options for 1.75 million shares in what one person familiar with the arrangement would only describe to Reuters as an "understanding" between the executive and the board. This so called understanding, which added roughly $80 million to his net worth, had not been listed in Continenza's employment contract or in any regulatory filings, causing more than a few eyebrows to rise.
In a letter Tuesday Senator Elizabeth Warren weighed in by urging the SEC to investigate the possibility that insider trading had taken place.
