A legal committee commissioned by the board of Eastman Kodak has cleared its executives of illegal insider trading.
The allegations stemmed from Kodak’s surprise foray into the generics manufacturing space this July with a $765 million loan agreement from the International Development Financial Corp., U.S. government agency. Within days of the announced deal, the loan was put on hold as reports surfaced that executives at the company, including its CEO, had made questionable stock trades just before prices the company’s shares shot up.
Now, the board-appointed committee has concluded that although Kodak’s general counsel failed to inform company management about the legal risks of giving its CEO stock option grants just before announcing positive corporate news, the transactions were not illegal.
The committee also looked into a $100 million donation made by another Kodak executive to a charity and determined that it “did not appear” unlawful.
The loan to Kodak, which was being made to help the long-time chemicals maker launch a pharma business for generic APIs, has been put on hold while the U.S. Securities and Exchange Commission (SEC) completes its investigation. The inspector general for the International Development Financial Corp. also reported this week that they are also investigating “whether Trump administration officials involved in the award had any conflicts of interest, and the impact of Kodak’s lobbying effort.”
Kodak said that it will continue to cooperate with the SEC investigation and that it is still well positioned to manufacture APIs.
