Elizabeth Warren Seeks SEC Insider Trading Probe After Kodak Shares Surge
Senator Elizabeth Warren wants U.S. regulators to examine possible insider trading and disclosure violations involving Kodak.
(Bloomberg) -- Senator Elizabeth Warren wants U.S. regulators to examine possible insider trading and disclosure violations involving Eastman Kodak Co. after the former film company’s shares soared when it announced a surprise foray into generic drugs with help from a $765 million government loan.
In a letter dated Tuesday, Warren asked the Securities and Exchange Commission to examine trading prior to Kodak’s July 28 announcement. On July 27, volume in the company’s shares surged and the stock rose about 20%. The stock had jumped more than 500% by the end of last week.
“This is just the latest example of unusual trading activity involving a major Trump administration decision,” Warren, a Massachusetts Democrat, wrote.
Kodak rose 4.4% to $15.60 at 11:59 a.m. in New York trading Tuesday.
The company intends to fully cooperate with any potential inquiries, a Kodak spokesperson said. SEC spokeswoman Judith Burns declined to comment.
Warren conceded that the rise in the stock price on July 27 may have been triggered by news sources in Rochester, New York -- where Kodak is based -- sharing embargoed information about the government loan via Twitter. But she questioned whether such reports could have been prompted by a violation of what’s known as Regulation Full Disclosure, a rule that requires public companies to release material information to all investors at the same time.
Kodak didn’t intend for the news to be published ahead of time, an external spokesperson for the company said in a statement.
In her letter, Warren also flagged a June 23 share purchase by Kodak Executive Chairman James Continenza, saying the transaction raises questions about whether he took advantage of “secret negotiations with the government over a lucrative contract” to trade on non-public information.
Continenza believes in the long-term success of Kodak and has bought stock at almost every available window since joining the company, a Kodak spokesperson said.
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