Kodak soars 84% after special committee it hired finds no violations of law related to government loan announcement

plus49/Construction Photography/Avalon/Getty Images Kodak soared on Wednesday after a special committee it hired found that it did not violate any laws related to its announcement that it received a $765 million loan from the US government. The report found that Kodak executives did not violate insider trading laws because […]

Kodak times square billboard sign workers


  • Kodak soared on Wednesday after a special committee it hired found that it did not violate any laws related to its announcement that it received a $765 million loan from the US government.
  • The report found that Kodak executives did not violate insider trading laws because throughout the loan process, Kodak general counsel told executives that the government loan application process was “at a highly uncertain stage.”
  • In a statement, Kodak said it would take actions recommended in the report to strengthen its practices, policies, and procedures.
  • Shares of Kodak soared more than 2,000% in July after the camera company announced it won a loan from the government to begin producing pharmaceuticals. 
  • Visit Business Insider’s homepage for more stories.

Eastman Kodak soared as much as 84% on Wednesday after it was determined by a special committee that executive trading and option grants in shares of Kodak just prior to a $765 million government loan announcement in July didn’t violate insider trading laws.

Kodak hired the Akim Gump Strauss Hauer & Feld law firm to investigate the matter after it received intense scrutiny from the likes of Senator Elizabeth Warren and others about its handling of announcing that it received a US government loan to be used for the production of pharmaceuticals, one day after it granted stock to its CEO.

In the subsequent two trading days, Kodak stock soared more than 2,000%, turning the CEO’s stock grant into a sizable sum.

The special committee said Kodak executives did not violate insider trading laws because throughout the loan process, Kodak general counsel told executives that the government loan application process was “at a highly uncertain stage.”

Read more: Legendary options trader Tony Saliba famously put together 70 straight months of profits greater than $100,000. Here’s an inside look at the strategy that propelled him to millionaire status before age 25.

Additionally, the firm found that Kodak’s failed to place an embargo on a media release about its signing of the government loan due to a misunderstanding, which led to two local Rochester news outlets to tweet about Kodak’s upcoming announcement one day before it was officially announced.

“While this early release of information was not in accordance with best practices, it did not violate Reg FD,” the special committee found. 

In a statement, Kodak said it would take actions recommended in the report to strengthen its practices, policies, and procedures.

“Kodak is committed to the highest levels of governance and transparency, and it is clear from the review’s findings that we need to take action to strengthen our practices, policies, and procedures,” Kodak said.

Shares of Kodak soared as much as 84%, to $11.44, on Wednesday.

Read more: MORGAN STANLEY: Buy these 6 stocks poised for gains as the economic recovery continues and Congress mulls more coronavirus stimulus

kodk chart1.JPG


Next Post

US podcast advertising will see strong growth this year

US podcast ad spend is still set to surpass $1 billion next year. The continued interest in podcast advertising is due in part to the industry overcoming earlier challenges that made ads less measurable. Insider Intelligence analyzes this industry and several others to provide in-depth analyst reports, proprietary forecasts, customizable […]