Potential Kodak deal suspended until “allegations are cleared”

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A government agency has said that a potential deal to help Eastman Kodak manufacture generic drugs is on hold until allegations of insider trading at the once-powerful photography company are cleared.
“The recent allegations of wrongdoing raise serious concerns,” the US International Development Finance Corporation said in a tweet Friday night. “We will not go any further until these allegations are clarified.”

The International Development Finance Corporation did not respond to a request for comment on Saturday.
Kodak KODK,
-7,63%
, who is based in Rochester, New York, declined to comment.

Last month, the International Development Finance Corporation signed a letter of intent to potentially grant Kodak a loan of $ 765 million to help pay for the factory changes needed to make pharmaceutical ingredients in short supply in the United States. .
News of the potential deal caused the company’s stock price to soar.
But last week Democratic Senator Elizabeth Warren asked the Securities and Exchange Commission to investigate whether insider trading laws were broken, citing “unusual business activity” before the deal was announced.
The SEC is now in the early stages of an investigation, according to the Wall Street Journal, which cited anonymous sources. The SEC declined to comment on the report.
On Friday, Kodak announced that it was conducting an internal review related to the loan agreement.
The loan, which has not been finalized, was to be used to expand factories in Rochester and St. Paul, Minnesota.
See also: Kodak shareholders weren’t the only beneficiaries of the sudden surge in stocks

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