Kodak's disclosure that it was in line for a government loan and the surrounding stock-trading activity are the focus of a Securities and Exchange Commission investigation, according to reports.
People familiar with the matter told The Wall Street Journal of the probe. They said it was at an early stage and might not result in allegations of wrongdoing.
Last month, Kodak said it had received a letter of interest from the government, putting in line to receive a $765 million loan to boost the production of a variety of ingredients for generic drugs.
The U.S. International Development Finance Corp. made the loan to Kodak under the Defense Production Act. The government hopes to curb U.S. dependency on pharmaceuticals made overseas, The Wall Street Journal reported.
Sen. Elizabeth Warren on Tuesday took to Twitter to call on the SEC to probe possible insider trading in Kodak shares, citing "unusual trading activity prior to the announcement" of the company's recent receipt of a government loan.
The unusual trading activity in Kodak shares raised "questions about whether one or more individuals may have engaged in insider trading or in the unauthorized disclosure of material nonpublic information regarding the forthcoming loan awarded under the Defense Production Act," the senator said in an Aug. 3 letter to SEC Chairman Jay Clayton.
Jim Cramer summed up his thoughts on Kodak in two words: Get out.
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