Background context

Recently, the American film company KODK announced a deal with the US government to manufacture generic pharmaceuticals in the US.

After the announcement, the company's stock price increased from around $2 on July 27 to $50 on July 29. Before this announcement, there was significant trading activity, leading some to speculate that the company's executives were involved in insider trading.

Others have dismissed the accusations of insider trading and have instead attributed the unusual volume of trading to a mishandled press embargo.

These days, the majority of class action lawsuits against KODK seemingly focuses on two particular points.

  1. The CEO Jim Continenza bought 46,737 shares on 6/23/2020 (prior to the drug deal announcement). However, the company has defended this by pointing out that Mr. Continenza regularly makes similarly sized purchases of his company's stock every fiscal quarter + he hasn't sold any of his holdings.

  2. The CEO Jim Continenza was granted options on 6/27/2030 (prior to the drug deal announcement). However, the company has defended this by pointing out that Mr. Continenza was granted these options in order to shield him from potential dilution as a result of a debt-equity swap

Question about this

Based on the information provided, what is the likelihood that KODK could be found guilty of insider trading from a legal standpoint?

  • 3
    KODK is the stock ticker, Eastman Kodak is the company.
    – Ron Beyer
    Aug 27, 2020 at 20:02
  • 1
    Unless a prosecutor lays charges for insider trading the chance is 0. The lawsuits may make a determination on the balance of probabilities that someone made trades based on insider knowledge without legal justification and to the detriment of the plaintiffs, but a civil lawsuit can't determine criminal guilt.
    – Ross Ridge
    Aug 27, 2020 at 20:57
  • 1
    Could easily go either way.
    – ohwilleke
    Aug 27, 2020 at 23:07

1 Answer 1


The NY AG thought that the CEO did and secured court ordered questioning related to the allegation, bringing the NY AG to a decision point in January of 2022 after the testimony was obtained. It could not find any reports of action taken by the NY state AG after that deposition of the Kodak CEO.

An update of a related case brought by shareholders as of September 20, 2022 stated:

In re Eastman Kodak Co. Sec. Litig., No. 21-cv-6418, 2021 WL 3361162 (W.D.N.Y. Aug. 2, 2021): We have been following the consolidated cases captioned under the heading In re Eastman Kodak Co. Securities Litigation since our 2020 Year-End Securities Litigation Update. The plaintiffs in this putative class action allege that Eastman Kodak and certain of its current and former directors and select current officers violated securities laws by failing to disclose that its officers were granted stock options prior to the company’s public announcement that it had received a loan to produce drugs to treat COVID-19. Dkt. No. 116 at 2. The defendants moved to dismiss earlier this year, arguing in part that the stock options grants did not constitute insider trading because the complaint lacked any allegation that the company and the individual defendants did not have the same information before the options grants were issued, which is necessary “[b]ecause an option grant is a ‘trade’ between a company and an officer,” Dkt. No. 159-1 at 21. The defendants also argued that the plaintiffs failed to allege that the “timing of the [o]ptions [g]rants was manipulated to provide additional compensation to the officers.” Id. The court recently heard oral argument on the pending motion, but has yet to issue a decision. Dkt. No. 196.

This case was dismissed on or around September 27, 2022.

  • Thanks for the followup. Out of curiosity, do you know if the US has a public database for federal and state court decisions? Or are these documents kept out of sight and out of mind for the general public? Although news websites are good, would be nice to jump directly to the court pdf.
    – AlanSTACK
    Dec 5, 2022 at 19:36
  • @AlanSTACK The database of federal court decisions is called PACER. There are nominal fees for downloading documents (pennies a page). There is no comparable database of state court decisions in most states (each court system, of course, does its own thing and there may be exceptions). Many court systems also issue new published decisions on websites but don't index their decisions at all and don't make them easily searchable.
    – ohwilleke
    Dec 5, 2022 at 22:05

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