The Securities and Exchange Commission is investigating the trading of Eastman Kodak stock after its price surged last week on news of a $765 million government loan, The Wall Street Journal reported on Tuesday.
The loan, meant to aid Kodak in producing drug ingredients, was announced last Tuesday, July 28. After the announcement, Kodak stock leaped as much as 350%. Shares soared even higher on Wednesday, at once point reaching a two-day gain of 2,190%.
But the stock gained as much as 26% the day before the announcement, raising questions about whether insiders traded on information about the government loan.
The investigation is at an early stage, and it’s unclear whether allegations of wrongdoing will be raised, a source told The Journal. The agency is looking into how Kodak handled the disclosure of the government loan.
In a letter on Monday, Sen. Elizabeth Warren called on the agency to investigate “several instances of unusual trading activity prior to the announcement of this deal.”
“This is just the latest example of unusual trading activity involving a major Trump administration decision,” Warren wrote. The senator cited other letters about possible insider trading of defense stocks and commodities before the administration’s strike in Iraq earlier this year.