NY Attorney General preparing insider trading lawsuit against Kodak | WHEC.com

NY Attorney General preparing insider trading lawsuit against Kodak

NY Attorney General preparing insider trading lawsuit against Kodak Photo: News10NBC.

Updated: May 18, 2021 12:14 PM
Created: May 18, 2021 07:42 AM

The stock was bought roughly a month before a planned $765 million loan to Kodak to produce generic drug ingredients was announced.

The deal was put on hold over allegations of wrongdoing when Kodak's share prices skyrocketed before the deal was announced.

A government watchdog group previously reported finding no wrongdoing by officials with U.S. International Development Finance Corporation, which helped create the loan. It did not look into any potential misconduct by Kodak staff.  

In a statement to News10NBC, Kodak said:

"The Attorney General has threatened to file a lawsuit premised on an unprecedented and novel application of insider trading law that seeks to impose liability in the absence of evidence of intent  The threatened litigation would not be supported by legal precedent or the facts.  Mr. Continenza did not engage in insider trading.  He was not in possession of material non-public information when he made the trade at issue, and his small stock purchase fully complied with Kodak’s insider trading policies, was pre-approved by Kodak’s General Counsel, and was subsequently found to be compliant by outside counsel in an independent investigation. Importantly, Mr. Continenza has bought Kodak stock in virtually every open window period – and has never sold a single share.   As we understand the Attorney General’s theory, the contemplated lawsuit would have a chilling effect on directors and executives of every public company, who could never invest in their own companies without fear of having good-faith decisions, pre-approved by counsel, second-guessed by regulators and charged as violations of law.”  

Continenza previously attributed Kodak's handling of the deal to "understaffing" caused by the pandemic and said the company would continue on with the production of the drug ingredients without the loan.

Experts told us a lot could hinge on whether the new Joe Biden administration will keep pushing the Trump administration plan forward.

News10NBC also sent an email to the AG's office for comment, in response, a spokesperson said the office had no comment.

We will keep you updated with the latest developments.

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