New York Attorney General Letitia James on Tuesday requested a state courtroom to order Eastman Kodak and its CEO James Continenza to offer evidence and testimony prematurely of a deliberate insider-trading lawsuit in opposition to them.
The firm and Continenza each violated New York securities legislation when he purchased 46,737 shares of the corporate’s inventory on June 23, James’ workplace alleged in courtroom filings.
The firm warned investors last month that James had threatened to sue over the matter.
Continenza’s inventory purchases got here a couple of month earlier than Kodak and the Trump administration announced a deal that gave the ailing camera company a shot at a $765 million mortgage below the Defense Production Act to help the manufacturing of drug substances crucial to preventing the COVID-19 pandemic.
The announcement despatched shares of the corporate hovering from simply over $2 per share to a peak of $60, which raised eyebrows about Continenza’s inventory buy at a median worth of $2.22 per share a month earlier. Ultimately, the feds halted the deal as regulators appeared into suspicious buying and selling exercise.
James on Tuesday requested a courtroom to order Continenza and Kodak General Counsel Roger Byrd to publicly testify and supply paperwork associated to Continenza’s June commerce.
“Corporate greed will never go unchecked in New York,” James stated in an announcement. “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.”
James alleged that the acquisition was in violation of the corporate’s inside-trading coverage. She stated Continenza didn’t search nor obtain written pre-clearance to make the acquisition, regardless of the corporate’s claims that it was in step with protocol.
James additionally stated that Kodak, its chief accounting officer, Continenza and CFO David Bullwinkle made “false and misleading” statements to buyers when it stated in its quarterly earnings report that Continenza’s June inventory buy was “in compliance with the Company’s insider trading policy.”
“Kodak even double downed on this fraud by relaying false information to investors before the company’s annual meeting that took place last month,” James added. “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.”
Ellen Davis, an out of doors spokeswoman for Kodak, famous that the corporate retained the DC legislation agency Akin Gump Strauss Hauer & Feld final 12 months to conduct an internal review, which discovered that Continenza’s transactions didn’t violate firm coverage or securities legal guidelines.
“Importantly, Mr. Continenza has purchased Kodak stock in virtually every open window period – and has never sold a single share,” Davis stated.
She added that earlier than Tuesday, Kodak “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,” Davis stated. “In addition to being mistaken on the info, the Attorney General’s novel and extremely problematic authorized concept that seeks to impose legal responsibility within the absence of intent would have a chilling impact on administrators and executives of each public firm, who might by no means spend money on their very own corporations with out concern of getting good-faith selections, pre-approved by counsel, second-guessed by regulators and charged as insider buying and selling.
“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.”