Report: SEC to review circumstances surrounding government loan to Kodak

The Securities and Exchange Commission is investigating the circumstances surrounding the announcement last week that Eastman Kodak will receive a $ 765 million government loan to make ingredients for generic drugs.

According to The Wall Street Journal, The SEC investigation is at an early stage and may not produce allegations of wrongdoing by the company or any individual. The Wall Street Journal said that among the areas examined by regulators was how Kodak was controlling loan disclosure, which led to a sharp rise in Kodak shares.

A Kodak spokesperson told WXXI News on Tuesday that he “intends to cooperate fully with any potential investigation,” and an SEC spokesperson declined to comment on the Wall Street Journal story.

News of a possible SEC investigation came the same day U.S. Senator Elizabeth Warren (D-Massachusetts) said she sent a letter to the SEC president asking the agency to look into the potential for misdemeanor. initiated.

Warren said there was an unusual trading pattern on Kodak shares that began before the public announcement last Tuesday. She said this may have been because Kodak inadvertently shared non-public information with media outlets, but Warren said if so, she wondered why Kodak did not disclose the information promptly. in accordance with SEC rules.

Warren also said Kodak executive chairman Jim Continenza and another board member appeared to have purchased significant amounts of company stock last month at a time when Kodak and the Trump administration were negotiating. the agreement.

A Kodak spokesperson noted on Tuesday that the loan deal had not been finalized. Regarding Continenza stock options, a statement from Kodak says he has regularly bought Kodak shares with his own money since joining the company in 2013 and has not sold any shares. of his actions while at Kodak.

When asked on Tuesday if he had any concerns about the Kodak deal, President Donald Trump told reporters at the White House: “Well, I don’t know. I was not involved in the case. The concept of the deal is good, but I’ll let you know.

He added: “If there is a problem, we will let you know very quickly, but I was not involved in it.”

The Associated Press also contributed to this story.

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