White House trade adviser Peter Navarro ripped Eastman Kodak amid an investigation into whether executives illegally disclosed information about a federal loan to produce pharmaceutical products.
“What happened at Kodak was probably the dumbest decisions made by executives in corporate history,” Navarro said in a Monday interview with CNBC.
“You can’t fix stupid. You can’t even anticipate that degree of stupidity.”
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The Securities and Exchange Commission (SEC) is investigating whether Kodak executives violated insider trading laws when disclosing a $765 million loan from the federal government. While the loan was announced on July 28, the company’s stock skyrocketed in price the prior day as the volume of Kodak shares traded increased drastically.
The U.S. International Development Finance Corporation announced on Aug. 7 that it was pausing the loan to Kodak after news of the SEC probe and the announcement of an internal company investigation came out earlier that day.
The Kodak loan was furnished under the Defense Production Act, a 1950 law giving the president broad authority to direct U.S. companies to make specific products during times of national crisis. President Trump
Donald John TrumpBiden's lead over Trump narrows in new national poll Biden faces hurdles in bid to mend ties with US allies Cheney calls pardoning Snowden 'unconscionable' after Trump says he's considering it MORE invoked the law in April to address shortages of medical products and equipment needed to fight the coronavirus pandemic and tasked Navarro with overseeing its use.
“We loved that project,” said Navarro, who has called for boosting U.S. production of pharmaceuticals to reduce the country’s reliance on imports, particularly from China.
“We don’t know why that happened or what they did. Let the investigation happen,” he continued. “We’re not looking in the rearview mirror.”
Kodak, as a publicly traded U.S. company, is required to carefully disclose information that will materially affect the price of its stock. The Wall Street Journal reported that Kodak shared news of the loan with reporters in Rochester, N.Y., home of its headquarters, the day before the formal government announcement without specifying it could not be published until then.
A Kodak spokeswoman declined to comment on Navarro’s criticism.
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