Edelman is helping Rochester-based Kodak deal with its PR crisis triggered by its internal communications team sending out a media advisory without an embargo time about the following day announcement of a $765M loan from the US to launch Kodak Pharmaceuticals.
Rochester’s CBS and ABC affiliates posted stories on their websites on July 27 about Kodak’s COVID-19 initiative with the Trump Administration, which sent the price of the company sharply upward.
They removed the stories after Kodak informed them the information was for background only.
Senator Elizabeth Warren wants Securities and Exchange Commission chairman Jay Clayton to investigate potential insider trading by Kodak executive chairman Jim Continenza and board member Phillipe Katz, made prior to the public announcement of the loan to the company.
"There were several instances of unusual trading activity prior to the announcement, raising questions about whether one or more individuals may have engaged in insider trading or in the unauthorized disclosure of material, nonpublic information regarding the forthcoming $765 million loan awarded under the Defense Production Act," she wrote.
"The purchase of stock by Mr. Continenza and Mr. Katz while the company was involved in secret negotiations with the government over a lucrative contract raises questions about whether these executives potentially made investment decisions based on material, non-public information, and whether that material, non-public information was potentially derived from their positions as executive chairman and board member respectively, Warren added.
She also noted that news reports indicate the unusual trading in Kodak’s stock may have been triggered by the company sharing non-public information about the loan with news outlets on a non-embargoed basis, and those outlets tweeting or posting online about the news prior to the public announcement.
If that’s the case, Warren wants to know why Kodak failed to inform the SEC of the inadvertent disclosure.
An Edelman spokesperson said Kodak’s PR team did not intend for the pharmaceutical news to be published and that Continenza has purchased stock during nearly every available window since he joined the board seven years ago.