- The Securities and Exchange Commission (SEC) is investigating trading activity related to the shares of Eastman Kodak, which occurred prior to the July 28 announcement of the $ 765 million credit received by the company to manufacture pharmaceutical ingredients, as the Wall Street Journal reported on Tuesday
- Kodak’s shares rose 2190% in the two days following the announcement. But the day before they had already marked a 26% rise
- In a letter on Monday, Elizabeth Warren had urged the SEC to investigate companies and individuals involved in the trading of large quantities of the company’s stock prior to the announcement, as well as to check if any insiders disclosed credit information before it was made public.
- “This is but the most recent example of unusual trading activity linked to an important decision by the Trump administration,” wrote the senator.
- To see the performance of the Kodak stock in real time, click here.
The Securities and Exchange Commission (SEC), the regulator of the US stock exchange, is investigating the trading of shares of Eastman Kodak, whose value increased considerably at the end of July thanks to the news of a $ 765 million credit granted to the company by the country’s government, as reported last Tuesday the Wall Street Journal.
The granting of the loan, which will help Kodak a produce pharmaceutical ingredients, was announced on Tuesday 28 July. The company’s share price after the announcement gained 350%. It climbed further the next day, eventually marking a 2190% increase from two days earlier.
Ma had already increased by 26% the day before the announcement, which raised doubts as to whether they had been carried out insider trading activities based on government credit information.
The investigation is still in a preliminary stage and it is unclear whether anyone will be charged with possible wrongdoing, a source told the Journal. The entity is reviewing Kodak’s approach to the credit announcement.
In a letter last Monday, the senator Elizabeth Warren had asked the institution to investigate on “several cases of unusual trading activities carried out prior to the announcement of this agreement”.
“This is not that the most recent example of unusual trading activity linked to a major decision by the Trump administrationWarren had written. The senator cited other letters about possible insider trading activities related to defense and commodity companies before the attack in Iraq wanted by the administration earlier this year.
The rally according to the Democratic Senator from Massachusetts may have sprung from premature revelations about government credit. The Wall Street Journal reported on July 29 that some reports and tweets from local television channels in Rochester, the New York State town where Kodak is based, may have been warning traders of the news. The stock’s trading volume had reached 1.6 million shares by the end of the trading day referred to in the article, well above the average volume of 231,000 shares recorded the previous month.
Warren had asked the SEC to investigate companies and individuals involved in the trading of large quantities of Kodak stock prior to the announcement, ascertaining to what extent they were in possession of confidential information and whether they disclosed credit information. He also encouraged the avinvestigate whether Kodak complied with a number of relevant disclosure requirements after initial news of the deal was leaked.
Kodak stock was trading at $ 15.85 per share on August 7, up 273% year to date.