Securities transactions carried out by Eastman Kodak Co President and CEO Jim Continenza Around the time the photography equipment maker learned it could receive a $ 765 million government loan did not violate internal policies, a law firm hired by the board of directors said on Tuesday. administration of the company.
However, an investigation found “loopholes” in Kodak’s insider trading processes where some people were not on insider lists, Akin Gump Strauss Hauer & Feld LLP said in a report to a special committee of independent directors of the board of directors of Kodak.
Kodak’s general counsel was found to be overwhelmed and enforced outdated policies, resulting in board members not being fully informed of relevant internal policies regarding option grants, the firm said. lawyers.
Last month, the U.S. government suspended its loan to Kodak to produce pharmaceutical ingredients at its U.S. factories, amid concerns over the company’s granting of options on 1.75 million shares to Continenza and other securities transactions carried out by managers.
The first news of the loan had pushed shares up 1000%, generating a windfall for executives, some of whom had received options a day earlier.
US lawmakers have raised “serious concerns” about the transactions and asked the Securities and Exchange Commission to investigate the circumstances surrounding the case.
“It is clear from the findings of the review that we need to take action to strengthen our practices, policies and procedures,” Continenza said Tuesday.
Akin said Continenza and board member Philippe Katz obtained prior authorization to negotiate from Kodak’s General Counsel, who concluded this was appropriate because the company’s loan application process was at a “very uncertain” stage.
(Report by Uday Sampath in Bengaluru, edited by Sherry Jacob-Phillips)