The SEC is investigating Kodak’s recent 2,190% stock spike following Elizabeth Warren’s call


KodakReuters / Steve Marcus

  • The Wall Street Journal reported on Tuesday that the Securities and Exchange Commission is investigating the trading of Eastman Kodak shares ahead of the public announcement of a $ 765 million government loan to make drug paraphernalia.
  • Kodak’s shares rose 2,190% in the two days following the announcement, yet it was up 26% before the loan information was made publicly available.
  • Warren urged the SEC in Monday’s letter to investigate individuals and corporate entities doing large trades of Kodak stock before the July 28 announcement, as well as whether anyone inside Kodak made the loan before it was made public. Information was shared on.
  • “This is just the latest example of unusual business activity involved in a major decision by the Trump administration,” Warren wrote in the letter on Monday.
  • Watch Kodak Stock Trading live here.

The Wall Street Journal reported on Tuesday afternoon that the Securities and Exchange Commission is investigating the trading of Eastman Kodak stock after news of a $ 765 million government loan was reported.

The loan, to assist Kodak in the manufacture of drug paraphernalia to fight coronovirus, was publicly announced on July 28. Following the announcement, Kodak stock jumped 350%. Shares rose on July 29, once reaching a two-day gain of 2,190%.

Yet the stock rose as much as 26% on the very first day of the announcement, raising questions about whether insiders reported government debt.

A source said the investigation is at an early stage and it is unclear whether allegations of wrongdoing will be raised, a source told the Journal. The agency is looking at how Kodak handled the disclosure of government debt.

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Sen. Elizabeth Warren called the agency to investigate “numerous instances of unusual business activity prior to the announcement of the deal” in a letter written on Monday.

“This is just the latest example of unusual business activity associated with a Trump administration decision,” Warren wrote. The senator cited previous letters about possible insider trading of defense stocks and commodities before the administration’s attacks in Iran.

The Massachusetts Democrat noted that the rally could originate from premature publication of government debt. The Wall Street Journal reported on July 29 that stories and tweets from TV stations in Rochester, Kodak’s hometown, NY likely alerted traders to the news. Kodak’s trading volume reached 1.6 million shares by the end of the day, up from the previous month’s average daily volume of 231,000.

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Warren asked the SEC to look into individuals and corporate entities making large trades of Kodak stock before the July 28 announcement, such parties were privy to information from non-republics, and whether they shared information on the debt . The agency should also investigate whether Kodak complied with the relevant disclosure requirements after the initial report was announced.

Kodak traded at a rate of $ 15.38 per share as of 12:17 pm ET Tuesday, up 273% year-to-date.

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