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The Securities and Exchange Commission is reportedly investigating the circumstances around Kodak’s announcement last week that it had won a $765 million government loan to manufacture pharmaceutical ingredients—a deal that sent the legacy camera firm’s soaring.
While the agency’s probe is at an early stage, the Wall Street Journal reports that the SEC is looking into Kodak’s disclosure of the loan, which began to leak on Monday, July 27—one day before the official announcement that prompted a massive spike in the company’s theretofore struggling stock price.
Kodak’s trading volumes and share price were already on the rise before the announcement was made, a dynamic seemingly tied to leaks disseminated by local news outlets in the company’s hometown of Rochester, N.Y. The SEC is said to be scrutinizing Kodak’s handling of the announcement, according to the WSJ, to determine whether it fell afoul of disclosure requirements for publicly traded companies.
News of the SEC’s investigation comes one day after Sen. Elizabeth Warren (D-Mass.) sent a letter to SEC chairman Jay Clayton, urging him to “investigate potential incidents of insider trading” related to Kodak’s deal with the U.S. government.
In addition to criticizing Kodak’s handling of the disclosure, Warren raised questions over stock purchases made by the company’s board of directors—including chairman and CEO Jim Continenza—in advance of the announcement, “at a time when Kodak and the Trump administration were negotiating the deal in secret.”
A Kodak spokesperson told Fortune that the company “intends to fully cooperate with any potential inquiries.” Representatives for the SEC declined to comment.
The clouds forming over Kodak and its handling of the loan disclosure is putting a damper on its share price, which was down 3% at Tuesday’s close, to $14.40 per share. While that’s a significant decline from the $33.20 per share it closed at last Wednesday, it’s still up considerably from the $2-plus per share territory that Kodak had struggled to break out of since the start of 2019.
Update, August 4, 2020: This story has been updated to include comment from Kodak and the SEC.
