© Reuters. FILE PHOTO: An employee cleans a Kodak booth at the Las Vegas Convention Center to prepare for CES 2019 in Las Vegas
WASHINGTON (Reuters) – The head of the US House Financial Services Committee and other leading democratic lawmakers on Wednesday asked federal regulators to investigate the securities transactions made by Eastman Kodak (N 🙂 and his executives when he learned that it was $ 765 million -Dollars could get government loans.
Maxine Waters (NYSE :), who chairs the committee, and other lawmakers said they had "serious concerns" about the transactions and asked the Securities and Exchange Commission to investigate the matter.
Kodak shares rose more than 1,000% last week after the loan was announced, creating a profit for executives, some of whom had been given options the day before.
US President Donald Trump said Tuesday that the government would investigate the circumstances surrounding the announcement of the loan, which would help the camera equipment maker manufacture medicines at its U.S. factories.
The SEC has refused to comment on a report saying it would conduct an investigation, and Trump has not elaborated. Kodak has announced that it will work together on potential inquiries.
At the heart of the concern is the granting of options for 1.75 million shares to the company's CEO based on what a person familiar with the agreement has described as "understanding" with their board of directors that was not previously in his employment contract listed had still been published.
In the letter, Waters and the other Democrats pointed to growing concerns about insider trading.
"Our concerns about insider trading during the COVID-19 pandemic were only compounded by our serious concerns arising from a series of securities transactions conducted by Eastman Kodak Co, its officers and board members," they wrote.
Waters and the heads of several other House committees on Tuesday asked the US International Development Finance Corp to provide all documents and communications related to the Kodak loan, which was granted under the Defense Production Act.
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