Eastman Kodak’s potentially lucrative deal to help the U.S. government make more generic drugs domestically is threatening to turn into a regulatory headache for the fallen photography giant.
Kodak’s stock price surged last week before the company announced its plans to work with President Donald Trump’s administration in exchange for a $765 million loan. That prompted Sen. Elizabeth Warren to ask Securities and Exchange Commission to investigate whether insider trading laws have been broken.
For months, Kodak's stock hovered around $2 per share. On Monday, the stock was at $2.62 per share. By Wednesday, the stock jumped to $33.20 per share. The price has come back down since, with it dropping to $14.40 on Tuesday.
The Wall Street Journal is now reporting the SEC has opened a probe. The SEC declined to comment while Kodak says it will cooperate with any inquiry.
Trump was asked Kodak's potential deal.
"I wasn’t involved in the deal," Trump said. "The concept of the deal is good, but I’ll let you know. We’ll — we’ll do a little study on that, and we’ll find out."