Eastman Kodak Co. on Monday said the New York attorney general has threatened to sue the company and its chief executive over a series of stock purchases made by the executive ahead of a planned $765 million deal with the U.S. government to produce drug ingredients.
The lawsuit would be based on alleged violations of New York state’s Martin Act, according to a disclosure filed with the Securities and Exchange Commission. New York’s Martin Act grants wide powers. It doesn’t require prosecutors to prove there was intent or that there were victims of an alleged fraud, something other agencies, including the SEC, have to prove.
A spokesman for the New York attorney general declined to comment.
The disclosure from Kodak said the alleged violations were in connection with CEO Jim Continenza’s purchase of 46,737 shares of the company’s stock on June 23.
Following those purchases, on July 28, Kodak and the Trump administration said the onetime photography giant was in line to receive a $765 million loan to help manufacture drug ingredients for the fight against the coronavirus and future health crises.