Kodak stocks plunge after federal loan put on hold

U.S. & World
Kodak Loan

FILE – This Jan. 25, 2011 file photo shows a Kodak slide projector in Philadelphia. Photography company Eastman Kodak is set to receive a $765 million government loan to create a new division that will help make ingredients for use in generic drugs. Kodak Pharmaceuticals will make critical pharmaceutical ingredients that have been identified as essential but have lapsed into chronic national shortage, as defined by the Food and Drug Administration. (AP Photo/Matt Rourke, File)

(CNN) – Kodak stock took a big hit Monday. Company shares plunged 40 percent after a $765 million federal loan was put on hold.

Regulators are reportedly looking into allegations of insider trading.

In a tweet Friday, the U.S. International Development Finance Corporation said the loan wouldn’t be granted unless Kodak is cleared of the allegations.

The DFC’s announcement came a few days after questions arose about heavy trading volume for the company’s stock.

Kodak executives are also under criticism about receiving stock options on July 27, a day before the loan announcement.

The $765 million loan was meant to launch Kodak Pharmaceuticals, which will make generic active pharmaceutical ingredients to reduce America’s dependency on foreign drug makers.

Kodak didn’t immediately respond for comment.

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