ROCHESTER, N.Y. — New York's Attorney General Letitia James says she is trying to compel Kodak's CEO to publicly testify about alleged insider trading, as part of her office's ongoing investigation.

In a deal announced last July, Kodak was due to receive a $765 million loan to launch a new pharmaceutical production operation. The deal, part of the Trump administration's Defense Production Act, would bring in millions of dollars and hundreds of new jobs to the Rochester area.

However, it was put on hold by the U.S. International Development Finance Corp. (DFC) when questions came up about a media leak of the deal and how and when some Kodak leaders acquired stock options. 

In December 2020, the DFC cleared Eastman Kodak of any wrongdoing. However, the AG's office continues its investigation.

James says she is petitioning the New York County State Supreme Court to have CEO Jim Continenza testify about him buying 46,000 shares of Kodak stock last year. The attorney general says Kodak's CEO made the purchase while he was in discussions with the Trump White House.

“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. Kodak even double downed on this fraud by relaying false information to investors before the company’s annual meeting that took place last month. 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.”

A Kodak spokesperson released this statement in response to the attorney general's request:

“This morning the New York Attorney General filed an application in New York state court seeking investigative testimony and documents from Kodak. Prior to this filing, 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 order asking for the very testimony in which she previously had no interest.

"Mr. Continenza was not in possession of material non-public information and, contrary to the Attorney General’s allegations, his small stock purchase was pre-approved by Kodak’s General Counsel during an open trading window in accordance with Kodak’s insider trading policy and was subsequently found to be compliant by outside counsel in an independent investigation. Importantly, Mr. Continenza has purchased Kodak stock in virtually every open window period – and has never sold a single share.

"In addition to being wrong on the facts, the Attorney General’s novel and highly problematic legal theory that seeks to impose liability in the absence of intent would have a chilling effect on directors and executives of every public company, who could never invest in their own companies without fear of having good-faith decisions, pre-approved by counsel, second-guessed by regulators and charged as insider trading.

"We are confident that the facts and the law are on our side and are prepared to present our case in court if there becomes a need to do so.”

 

Attorney General James Asks Court to Force Kodak CEO to Publicly Testify by Adam Penale on Scribd