Report: SEC To Look At Government Loan To Kodak
ROCHESTER, NY (WXXI) - The Securities and Exchange Commission is investigating the circumstances involving last week’s announcement that Eastman Kodak will receive a $765 million government loan to make ingredients for generic drugs.
According to the Wall Street Journal, the SEC probe is at an early stage and might not produce allegations of wrongdoing by the company or any individuals. The Wall Street Journal said that among the areas being probed by regulators is how Kodak controlled disclosure of the loan, which caused Kodak stock to rise sharply.
A spokesperson for Kodak told WXXI News on Tuesday that it “intends to fully cooperate with any potential inquiries,” and a spokesperson for the SEC declined comment on the Wall Street Journal story.
Word of a possible SEC probe came on the same day that U.S. Senator Elizabeth Warren, (D-Massachusetts), said she sent a letter to the SEC Chairman asking that agency to look at the potential for insider trading.
Warren said there was an unusual trading pattern in Kodak stock that began prior to the public announcement last Tuesday. She said that may have been due to Kodak sharing non-public information with media outlets inadvertently, but Warren said if that is the case, she is wondering why Kodak did not promptly disclose the information as required by SEC rules.
Warren also said that Kodak’s executive chairman, Jim Continenza, and another member of the board appear to have purchased substantial amounts of company stock last month at a time when Kodak and the Trump administration were negotiating the deal.
A Kodak spokesperson on Tuesday noted that the loan agreement has not been finalized. Regarding Continenza's stock options, a statement from Kodak said that he has regularly purchased Kodak shares with his own money since joining the company in 2013 and has not sold a single share of his stock during his time at Kodak.
Asked Tuesday if he had concerns about the Kodak deal, President DonaldTrump told reporters at the White House: “Well, I don’t know. I wasn’t involved in the deal. The concept of the deal is good, but I’ll let you know.”
He added, “If there is any problem, we’ll let you know about it very quickly, but I wasn’t involved in it.”
The Associated Press also contributed to this story.