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Kodak’s $765 million government loan is being investigated by House Democrats after Elizabeth Warren urges probe


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Kodak’s $765 million government loan is being investigated by House Democrats after Elizabeth Warren urges probe

Reuters / Steve Marcus House Democrats have launched an investigation into Kodak and the government office that issued it a $765 million loan to shift to drug production. Rep. Maxine Waters, the chair of the House Financial Services Committee, was among the Democratic leaders who sent a letter on Wednesday asking the US International Development…

Kodak’s $765 million government loan is being investigated by House Democrats after Elizabeth Warren urges probe

kodakReuters / Steve Marcus

  • House Democrats have launched an investigation into Kodak and the government office that issued it a $765 million loan to shift to drug production.
  • Rep. Maxine Waters, the chair of the House Financial Services Committee, was among the Democratic leaders who sent a letter on Wednesday asking the US International Development Finance Corporation for all communications concerning the Kodak loan.
  • Democratic leaders also sent a letter to Kodak CEO Jim Continenza on Tuesday, The Wall Street Journal reported.
  • On Tuesday, the Securities and Exchange Commission launched its own investigation into the Kodak announcement, following prompting by Sen. Elizabeth Warren.
  • Watch Kodak trade live on Markets Insider.
  • Read more on Business Insider.

A group of House Democrats has launched an investigation into Eastman Kodak’s $765 million loan from a government agency.

In a letter released Wednesday, Democratic leaders including Rep. Maxine Waters, the House Financial Services Committee chair, asked the US International Development Finance Corporation, the agency responsible for the loan through the Defense Production Act, for all communications about the loan.

The group also questioned why the government office would support Kodak, “an organization that was on the brink of failure in 2012 and was unsuccessful in its previous foray into pharmaceutical manufacturing, in its efforts to develop the capacity to produce up to 25 percent of domestic pharmaceutical components.”

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On July 28, the Trump administration announced that it planned to give Kodak a first-of-its-kind loan to help the photography company switch to drug production.

Shares of the company skyrocketed as much as 2,190% in two days. An uptick of more than 20% a day before the loan was announced drew scrutiny because of stock options granted to CEO Jim Continenza and other executives.

On Tuesday, the Securities and Exchange Commission launched its own investigation into irregular stock movements around the announcement of the loan.

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The SEC investigation was urged by Sen. Elizabeth Warren, who wrote in a letter on Monday that “this is just the latest example of unusual trading activity involving a major Trump administration decision.”

In a letter to Continenza on Tuesday, the group of Democratic leaders addressed concerns about the company’s lack of pharmaceutical experience and the stock options granted to executives before the loan was announced, The Wall Street Journal reported on Wednesday.

Eastman Kodak has surged more than 217% year-to-date.

Read more: MORGAN STANLEY: The government’s recession response has the stock market heading for a massive upheaval. Here’s your best strategy to capitalize on the shift.

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