New York Attorney General Letitia James has Kodak CEO Jim Continenza in her crosshairs as she targets the business giant for allegedly profiting from the COVID-19 pandemic.
James announced that her investigation into Continenza, the CEO of the Eastman Kodak Company, led to the filing of a petition✎ EditSign with the New York County State Supreme Court to have Continenza publicly testify about his purchase of more than 46,000 shares of Kodak stock early last summer and the company's subsequent false statements about that trading to investors last month.
It is alleged that the Kodak CEO illegally traded company stock while negotiating a “confidential, game-changing $655 million loan with President Donald Trump’s White House at the beginning of the COVID-19 outbreak.
“Continenza’s stock purchase occurred in the midst of the public health crisis last June, as the pandemic exposed domestic shortages in the chemical building blocks used to make medicines,” James announced. “Continenza made the purchase while he was leading secret discussions with the Trump White House and the federal government for a $655 million loan to enable Kodak to repurpose legacy assets in Rochester to produce chemicals to address this need."
James’ petition also asks the court to order public testimony from Kodak’s general counsel, as well as for the company to produce related documents.
“Corporate greed will never go unchecked in New York,” James said in a statement. “As millions of New Yorkers and Americans across this nation lost their jobs and were waiting for unemployment checks, Kodak’s CEO was using insider information to illegally trade company stock.”
According to James, on June 23, 2020, Continenza bought 46,737 shares of Kodak stock at a weighted average price of $2.22 per share, a week after Kodak filed a confidential application for the loan “to develop a new business to produce chemicals to manufacture supplies for medicines for patients hospitalized with COVID-19."
“Kodak’s loan application followed extensive confidential dealings — led by Continenza personally — held directly with the White House and other federal officials,” James noted.
The new project was expected to increase revenue at Kodak by more than $300 million annually by 2025.
A month after Continenza purchased the stock, Kodak signed a public letter of interest with the federal government for the loan — which by then had grown to $765 million — causing Kodak stock to soar.
The day after the news was announced, Kodak’s stock price topped $60 per share, more than 27 times what the CEO had paid for the stocks weeks earlier.
Officials at Kodak allegedly later gave false statements to the court to circumvent claims of insider trading.
“Kodak even doubled-down on this fraud by relaying false information to investors before the company’s annual meeting that took place last month,” James added. “Corporate executives don’t get to play by their own rules, which is why today’s action seeks to shine a light on Kodak and Mr. Continenza’s unlawful behavior and level the playing field.
“We are asking the court to order Mr. Continenza to testify in open court, so the facts can be exposed before the American people. My office will use every tool at its disposal to hold those who violated the law accountable.”
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