ROCHESTER, N.Y. (WROC) — Eastman Kodak Company announced an appointment of a special committee that will look into the recent activities surrounding the announcement of a potential loan for Kodak Pharmaceuticals that may have broke insider trading laws.
Kodak’s depressed stock price surged last week before the company announced its plans to work with President Donald Trump’s administration in exchange for a $765 million loan to help launch a pharmaceutical division aimed at producing more drugs domestically.
That prompted Sen. Elizabeth Warren to send a Monday letter asking the Securities and Exchange Commission to investigate whether insider trading laws have been broken.
“The Committee, comprised of directors Jason New and William G. Parrett, will oversee an internal review of recent activity by the Company and related parties in connection with the announcement of a potential loan by the U.S. International Development Finance Corporation to support the launch of Kodak Pharmaceuticals,” a press release reads.
The SEC is now in the early stages of a probe, according to a report published Tuesday by The Wall Street Journal. The newspaper cited unidentified people familiar with the matter.
MORE | Kodak lands $765M federal loan to develop prescription drug ingredients, aims to add 300 jobs in Rochester
“There were several instances of unusual trading activity prior to the announcement, raising questions about whether one or more individuals may have engaged in insider trading or in the unauthorized disclosure of material, nonpublic information regarding the forthcoming $765 million loan awarded under the Defense Production Act,” wrote Sen. Warren.
The U.S. International Development Finance Corporation says the deal is on hold until the insider trading allegations are cleared.
Find Kodak’s full release below:
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