Kodak execs didn't illegally trade stock while touting big move into pharma: report

Question mark background
Kodak's future in pharma could be determined by a $765 million federal loan that is currently on hold. (iStock)(tostphoto / iStock / Getty Images Plus)

Eastman Kodak's pharma ambitions took a hit when insider trading accusations put $765 million in U.S. funding on the skids. But a special committee hired by Kodak's board has now cleared its top brass of wrongdoing—a decision that could clear its path into drug manufacturing.

The board-appointed committee cleared (PDF) Kodak's executives and shareholders of insider trading after a series of questionable stock moves that followed a government loan agreement. That $765 million loan has since been suspended.

The committee's report said precleared stock trades for CEO Jim Continenza and board member Philippe Katz did not break the law or violate Kodak's internal rules because the status of the loan at the time of preclearance was "highly uncertain."

On-Demand Webinar

Leveraging A Medical Record-Enriched Patient Dataset for COVID-19 Research

You are invited to join a webinar that will explore the ways researchers can leverage this enriched dataset for important COVID-19 research. Sign up today for this informative webinar to learn how you can leverage one of the only medical record reviews solely using real-world data from hospitalized COVID-19 patients.

The committee also determined that two investors who dumped millions of shares soon after the loan announcement weren't tipped off ahead of time. And incentive grants for Kodak executives were also appropriate given the uncertain status of the payment, the committee said.

The $765 million outlay, which Kodak dubbed "Project Tiger" in its working stages, was set to be awarded by the U.S. International Development Finance Corporation (DFC). The DFC halted those plans in early August after the Securities and Exchange Commission (SEC) and House Democrats launched their own investigations into Kodak's behavior.

While effectively clearing Kodak's upper ranks of wrongdoing, the committee recommended the company strengthen its legal department and insider trading rules to avoid moves that would attract government scrutiny. 

In a statement, Kodak said it would "expeditiously" pursue those recommendations. 

RELATED: Kodak's $765M manufacturing loan on the rocks as red flags multiply

Suggested Articles

Baxter Biopharma Services will spend $50 million to expand its facility in Bloomington, Indiana, to include fill-finish technology.

The FDA knocked India's Aurolife for chronic water leaks from its ceiling that may have contaminated multiple generic medicines.

The company was simultaneously hoping for an approval of a granules formulation to reach younger patients, but that didn't come as expected.