The Securities and Exchange Commission (SEC) is investigating possible insider trading at Eastman Kodak following a spike in the company’s shares around the announcement of a $765 million government loan to manufacture pharmaceutical ingredients. Sen. Elizabeth Warren had called on the SEC to investigate because shares began rising even before the official announcement of the loan.
“The Monday, July 27, trades are not the only questionable stock trade involving Kodak and the company’s Defense Production Act deal with the Trump administration. The Kodak chairman and other members of Kodak’s board of directors appear to have purchased substantial amounts of company stock last month, ahead of the public announcement, at a time when Kodak and the Trump administration were negotiating the deal in secret,” Warren said in a letter to SEC Chair Jay Clayton.
“To the extent that the individuals who traded in Kodak stock were privy to any nonpublic information, how and from whom did they obtain this information?” Warren wrote. “Did any individuals with knowledge of the loan deliberately or inadvertently share information with anyone inside or outside of Kodak who was not authorized to have the information?”
Some trading the day before the official announcement may be due to Kodak letting information about the loan out a little early, but that’s an issue in itself.
Trump touted the loan to Kodak as “a breakthrough in bringing pharmaceutical manufacturing back to the United States.” Kodak has been producing advanced chemicals since its photography business plummeted. Under the new deal, it will manufacture ingredients for generic drugs.