New York prosecutor Letitia James said Tuesday that she has filed a petition in New York's Supreme Court in New York to force Eastman Kodak Co.'s CEO to publicly testify about his alleged insider trading during the pandemic.
Ms. James said in a press release that Jim Continenza, CEO of the Rochester, New York-based company, would testify about his purchase of more than 46,000 shares in the Kodak share early last summer and about Kodak's subsequent false statements about that trade to investors last year. month
The statement says that Continenza's share purchase took place in mid-June last year during the COVID-19 public health crisis. It said it made the purchase while leading secret talks with the Trump White House and the federal government on a loan to enable Kodak to reuse older assets in Rochester to produce chemicals to deal with the pandemic.
The petition states that just over a month after Continenza's share purchase, Kodak signed a public letter of interest with the federal government for a $ 765 million loan to develop a new chemical production business, which led to the share price reaching more than 27 times what Continenza had paid for it.
The petition also calls on the court to order public testimony from Kodak's Secretary General and for the company to produce related documents.
Kodak said in a statement, “Prior to this application, the company repeatedly offered to make witnesses available and the Attorney General repeatedly declined. It is telling that she has now chosen to publicly seek this arrangement and ask for the testimony for which she previously had no interest.
”Mr. Continenza did not possess material non-public information and, contrary to the prosecution's allegations, his small purchases were approved in advance by Kodak's General Council under an open trading window in accordance with Kodak's insider trading policy and subsequently complied with by an external lawyer in an independent inquiry. It is important that Mr. Continenza has bought Kodak shares in virtually every open window period ̵
"In addition to the factual errors, the Minister of Justice's new and very problematic legal theory aimed at introducing liability in the absence of intent would have a chilling effect on board members and managers of all public companies, who could never invest in their own companies without fear of having good faith decisions, previously approved by lawyers, others guessed by regulators and charged as insider trading.
"We are convinced that facts and law are on our side and are prepared to present our case in court if there is a need to do so."
It was reported in May that Ms James' office was preparing an insider deal against Kodak and Mr. Continenza with a focus on the issue.
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