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U.S. House Democrats urge SEC to dig into Kodak transactions

Stock Markets Aug 05, 2020 10:50PM ET
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© Reuters. FILE PHOTO: A worker cleans a Kodak booth at the Las Vegas Convention Center in preparation for 2019 CES in Las Vegas
 
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WASHINGTON (Reuters) - The head of the U.S. House Financial Services Committee and other top Democratic lawmakers on Wednesday asked federal regulators to investigate securities transactions made by Eastman Kodak and its executives around the time it learned it could receive a $765 million government loan.

Representative Maxine Waters (NYSE:WAT), who chairs the committee, and the other lawmakers said they had "serious concerns" about the transactions and asked the Securities and Exchange Commission to investigate the circumstances surrounding the matter.

Kodak shares surged more than 1,000% last week after the loan was announced, generating a windfall for executives, some of whom had received options one day earlier.

U.S. President Donald Trump on Tuesday said the government would investigate the circumstances surrounding the announcement of the loan, which will help the photographic equipment maker shift into making pharmaceuticals at its U.S. factories.

The SEC has declined to comment on a report saying that it would investigate, and Trump did not elaborate. Kodak has said it will cooperate with any potential inquiries.

Concerns center on the company's granting of options for 1.75 million shares to its executive chairman 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.

In the letter, Waters and the other Democrats cited growing concerns about insider trading.

"Our concerns regarding insider trading during the COVID-19 pandemic have only been heightened by our serious concerns arising from a series of securities transactions engaged in by Eastman Kodak Co, its executive officers and its board members," they wrote.

Waters and the heads of several other House committees on Tuesday asked the U.S. International Development Finance Corp to provide all documents and communications related to the Kodak loan, which was made under the Defense Production Act.

U.S. House Democrats urge SEC to dig into Kodak transactions
 

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Comments (6)
Michael Todd
Michael Todd Aug 06, 2020 4:07AM ET
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The CEO deserves the stocks for the Grant efforts but shouldn't exercise the right to sell within 2 years.
Kaveh Sun
Kaveh Sun Aug 06, 2020 12:06AM ET
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CEO bought 1 day before the announcement. That smells.
Thom Miller
Thom Miller Aug 05, 2020 11:57PM ET
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Let’s see here. Couldn’t make a buck since the 1984 LA Olympics when they let Fuji outbid them on their home turf to be the Official Film of the Olympics. Then Kodak invented the digital camera, and blew that opportunity within a few years. They spent their employees’ retirement fund to keep themselves solvent before going bankrupt. And now all of a sudden out of thin air “the company that couldn’t” was paid how much by whom to development what? Kodak was a case study we studied it at Harvard Business School many years ago....here’s a new chapter!
Keefe Carrillo
Keefe Carrillo Aug 05, 2020 11:57PM ET
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Let me guess. Please tell us how this ends :D
al ma
al ma Aug 05, 2020 10:16PM ET
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they halted lots of time during busy date July 29. I sold it at 47 but they hold it dumped it for me at the lowest price. I believe us government and kodak worked to gether to raise money for the stimulus check and other benefits that they are paying for unemployed ppl. I lost lots of money because of this stock.
Jimmy John
Jimmy John Aug 05, 2020 7:39PM ET
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Please check into hold much stock the Fed has purchased.
Plopseven Schwartz
Plopseven Schwartz Aug 05, 2020 7:34PM ET
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Can someone look into NovaVax’s 3,900% climb too plz
Jay West
Jay West Aug 05, 2020 7:34PM ET
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That’s Fauci’s money. Hands off! Big pharma has too nany lobbying dollars to let that happen. Kodak is just a distraction. Dirty politicians are pointing in the other direction. Quite upsetting.
Jay West
Jay West Aug 05, 2020 7:34PM ET
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No honor among thieves.
 
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