SEC investigates circumstances around Kodak’s $765million government loan to make drugs in U.S. factories that sent shares soaring by 1,000%
- Kodak CEO Jim Continenza was awarded 1.75 million stock options last Monday
- He bought those options at prices ranging from $3.03 to $12 per share
- Options were awarded one day before Trump administration announced the loan to Kodak
- Announcement sent stock price of struggling film company soaring On Friday, Kodak’s individual share price closed at $21.85 – a 734% increase
Kodak’s CEO, Jim Continenza (above), was awarded stock options that could net him a profit of more than $30M just a day before the Trump administration announced a $765M loan to develop generic pharmaceuticals
The U.S. Securities and Exchange Commission is investigating the circumstances around Eastman Kodak Co’s announcement of a $765million government loan to make drugs at its U.S. factories that sent stock prices soaring last week.
Shares of Kodak surged more than 1,000 per cent after news of the loan was made public, generating a windfall for executives, some of whom received options one day before the deal with President Donald Trump was announced.
Jim Continenza, who heads the beleaguered Rochester, New York-based film company, and three other top Kodak executives were awarded stock options that included the right to buy Kodak stock at $3.03, $4.53, $6.03, and $12 per share until February 2026.
According to filings obtained by the Popular Information newsletter, Continenza was the primary beneficiary, having been awarded 1.75 million options.
Most of those options – 981,707 shares – were purchased at a stock price of $3.03 per share.
The Wall Street Journal on Tuesday reported that the SEC investigation is at an early stage and may not produce allegations of wrongdoing by Kodak or any individuals, according to people familiar with the matter.
The company’s shares were down 2 per cent at $14.64.
The SEC declined to comment. A representative for Kodak said it intends to fully cooperate with any potential inquiries.
U.S. Senator Elizabeth Warren on Tuesday wrote a letter to the SEC asking that it investigate potential insider trading that happened before the announcement of the $765million loan.
There was heavy trading volume in Kodak shares the day before the loan was announced.
The company granted Continenza options for 1.75million shares as the result of what a person familiar with the arrangement described as an ‘understanding’ with its board that had previously neither been listed in his employment contract nor made public.
A Kodak representative said that Executive Chairman Jim Continenza has regularly purchased Kodak shares since joining the company in 2013 and has invested more capital in the company than he has earned during his tenure.