(Reuters) – The U.S. government will promptly investigate the circumstances surrounding Eastman Kodak Co’s announcement of a $ 765 million government loan to manufacture drugs at its U.S. factories, President Donald Trump said on Tuesday.
Shares of the company closed 3.61% lower at $ 14.40 after the Wall Street Journal earlier announced that the United States Securities and Exchange Commission would investigate the transaction.
Trump told reporters the concept of the arrangement was good because it would help Kodak move into a new area of business, but he was not personally involved in the deal.
“We’re going to do a little study on this. We will find out. If there is a problem, we will let you know very quickly, ”he told reporters during a briefing. “We’ll see what it is. “
The SEC investigation is at an early stage and may not produce allegations of wrongdoing by Kodak or any individual, the WSJ said, citing people familiar with the matter.
The SEC declined to comment. A representative from Kodak said he intends to cooperate fully with any potential investigation.
U.S. Senator Elizabeth Warren wrote a letter to the SEC on Tuesday asking it to investigate possible insider trading ahead of the loan’s announcement.
The day before the announcement, the volume of trading in Kodak shares was significant. Shares jumped more than 1,000% last week, generating a windfall for executives, some of whom were given options a day before the announcement.
The company granted its executive chairman options for 1.75 million shares following what one person familiar with the deal described as an “agreement” with its board of directors that had previously neither listed in his employment contract nor made public.
A representative from Kodak said that Executive Chairman Jim Continenza has regularly bought Kodak shares since joining the company in 2013 and has invested more capital in the company than he earned during his tenure. .
Reporting by Andrea Shalal and Eric Beech i Washington; Munsif Vengattil in Bangalore, Jessica DiNapoli in New York; Editing by Shounak Dasgupta, Lisa Shumaker and Tom Brown