SEC Investigates Kodak Over Stock Surge After Loan

The Wall Street Journal reports:

The Securities and Exchange Commission is investigating the circumstances around Eastman Kodak Co.’s  announcement of a $765 million government loan to make drugs at its U.S. factories, according to people familiar with the matter.

News of the loan last week caused Kodak’s shares to rise as high as $60, before falling to about $15 on Monday due to a dilution in the shares. Amid the heightened volatility, trading volume has surged.

The price spike briefly produced a potential windfall for company executives who owned stock-option grants, some of which were granted on July 27, the day before the loan became public.

Last week it was reported that Kodak’s CEO was granted $50 million in stock options on the day before the “loan” was announced.