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Kodak stock soars after review finds no insider trading

September 16, 2020. Summarized by summa-bot.

LAS VEGAS, NV - JANUARY 10: Kodak's Printomatic instaprint cameras are displayed at the Kodak booth during CES 2018 at the Las Vegas Convention Center on January 10, 2018 in Las Vegas, Nevada. CES, the world's largest annual consumer technology trade show, runs through January 12 and features about 3,900 exhibitors showing off their latest products and services to more than 170,000 attendees. (Photo by David Becker/Getty Images)

Kodak stock briefly surged more than 80% on Wednesday after a special committee's investigation found no evidence of insider trading prior to the announcement of a US government loan.

New York (CNN Business)Kodak (KODK) stock briefly surged more than 80% on Wednesday after a special committee's investigation found no evidence of insider trading prior to the announcement of a US government loan.

Although the review found no signs of Kodak breaking the law, it did find the company mishandled stock options granted to its CEO in the days leading up to the loan deal being signed.

The investigation's findings were released in an 88-page report on Tuesday from law firm Akin Gump Strauss Hauer & Feld, which the committee hired to conduct a probe of Kodak's stock events "leading up to and immediately following" the July announcement of a $765 million federal loan for the production of drug ingredients — part of an effort to reduce America's dependence on foreign drug makers.

Kodak CEO Jim Continenza and other Kodak executives fell under scrutiny for receiving stock options the day before the loan's announcement on July 27.

The review by Akin Gump concluded insider-trading laws were not violated, noting Kodak executives were informed by the general counsel that the application process for the loan was "at a highly uncertain stage. "

However, the report did find Kodak at fault for the early disclosure of the government loan a day before it was officially announced, but not in violation of the laws.

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