Sen. Warren calls for SEC insider trading examination concerning Kodak
- Guest Posts
- August 5, 2020
After updates on a potential second act for Rochester-based Kodak in the U.S. pharmaceutical market – one U.S. senator is requiring an examination concerning the chance of insider trading.
A week ago, the organization got a $765 million government loan to enable the organization to start creating pharmaceutical products. The expectation is that creation in the U.S. will increase to where the nation can create 25% of active pharmaceutical ingredients for generic medications. The organization says 360 new jobs will be included the procedure.
The declaration sent Kodak’s stock soaring, the cost of shares quadrupling between the end of the market the Monday before the news and the morning of the next Wednesday. Trading must be ended twice that Wednesday because of the expansion in trading of Kodak stock.
Notwithstanding, the news caused a stir, and a few, including Senator Elizabeth Warren of Massachusetts, drifted charges of potential insider trading.
Tuesday, the senator required the SEC to explore.
“Kodak (yes, the film company) got a big government contract to make generic COVID-19 drugs. Surprise: @Kodak’s trading volume spiked before the announcement,” Warren wrote Tuesday on Twitter. “Even Kodak’s chairman bought stock. I want the SEC to investigate for possible insider trading.”
Warren’s letter, dated August 3, claims, “This is just the latest example of unusual trading activity involving a major Trump administration decision.”
“With regard to Kodak, analysts have observed an unusual trading pattern in company stock that began prior to the public announcement,” Warren wrote. “Over the last year, the average trading volume of Kodak’s stock has been 236,479 shares per day. On Monday, July 27, however, a day before the public announcement, 1,645,719 shares, almost eight times the daily average, were traded…Individuals who purchased stock immediately prior to the announcement earned an extraordinary return.”
Warren likewise charges Kodak’s chairman, Jim Continenza, and others on the Board of Directors bought a lot of stock before the declaration, as the organization and the national government were arranging the deal.
A representative for Kodak says it expects to completely help out any requests that are raised, and that the advance understanding despite everything has not in fact been finalized.
“The Company has a letter of interest (LOI) from the government, which indicates that Kodak has successfully completed the DFC’s initial screening,” the spokesperson said. “The DFC will next initiate a diligence period before potentially committing financing.”