ROCHESTER, N.Y. (WROC) — According to a report from the Wall Street Journal, a government watchdog agency has found no wrongdoings in the process that created a proposed $765 million loan to Eastman Kodak.
The Sunday report from the WSJ states that the investigator general of the U.S. International Development Finance Corporation didn’t find evidence of conflicts in the plan or any misconduct from DFC officials.
The inspector general of the agency that brokered the deal provided his assessment last week to Sen. Elizabeth Warren, who had called for the investigation after the one-time photo giant landed a potential $765 million government loan in July.
Warren’s letter cites analysis that there was an unusual trading pattern in Kodak stock that began prior to the public announcement of the deal.
“The day before the public announcement, trading volume in Kodak stock was almost eight times higher than the daily average and the company’s stock rose approximately 20%. On the day the deal was officially announced, the stock rose by over 200% – and the day after it rose by more than 300%. Individuals who purchased the stock prior to the announcement earned an extraordinary return,” the letter said.
The loan — meant to bring pharmaceutical manufacturing to Rochester — came under scrutiny and was put on hold when a surge in stock prices began before the official announcement.
Earlier this year, Kodak conducted an internal review of the activity by the company’s CEO and found no wrongdoing as well.
Although Kodak became world famous for its inroads in photography before digital technology decimated the market for film, it also has a lesser-known pharmaceutical division. The government loan agreement, which hasn’t been finalized, is supposed to used to help expand and renovate existing plants in Rochester and St. Paul, Minnesota.