(Reuters) – The U.S. Securities and Exchange Commission is investigating the circumstances around Eastman Kodak Co’s announcement of a $765 million government loan to make drugs at its U.S. factories, the Wall Street Journal reported on Tuesday.
The company’s shares were down 2% at $14.64.
The SEC investigation is at an early stage and may not produce allegations of wrongdoing by Kodak or any individuals, the WSJ said, citing people familiar with the matter.
The SEC declined to comment. A representative for Kodak said it intends to fully cooperate with any potential inquiries.
U.S. Senator Elizabeth Warren on Tuesday wrote a letter to the SEC asking that it investigate potential insider trading that happened before the announcement of the $765 million loan.
There was heavy trading volume in Kodak shares the day before the loan was announced. Shares of Kodak surged last week more than 1,000%, generating a windfall for executives, some of whom received options one day before the deal with President Donald Trump was announced.
The company granted its executive chairman options for 1.75 million shares 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.
A Kodak representative said that Executive Chairman Jim Continenza has regularly purchased Kodak shares since joining the company in 2013 and has invested more capital in the company than he has earned during his tenure.
(Reporting by Munsif Vengattil in Bengaluru and Jessica DiNapoli in New York; Editing by Shounak Dasgupta and Lisa Shumaker)