The SEC is investigating Kodak's recent 2,190% stock spike following Elizabeth Warren's calls for action

• The Securities and Exchange Commission is investigating trading of Eastman Kodak shares before the public announcement last week of a $765 million government loan to make drug ingredients, The Wall Street Journal reported on Tuesday.
• Kodak shares spiked as much as 2,190% in the two days after the announcement on July 28. It also gained as much as 26% the day before information about the loan was made public.
• In a letter on Monday, Warren urged the SEC to investigate individuals and corporate entities making large trades of Kodak stock before the announcement, as well as whether anyone inside Kodak shared information about the loan before it was made public.
• "This is just the latest example of unusual trading activity involving a major Trump administration decision," Warren wrote.
• Watch Kodak stock trade live here.

The Securities and Exchange Commission is investigating the trading of Eastman Kodak stock after its price surged last week on news of a $765 million government loan, The Wall Street Journal reported on Tuesday.

The loan, meant to aid Kodak in producing drug ingredients, was announced last Tuesday, July 28. After the announcement, Kodak stock leaped as much as 350%. Shares soared even higher on Wednesday, at once point reaching a two-day gain of 2,190%.

But the stock gained as much as 26% the day before the announcement, raising questions about whether insiders traded on information about the government loan.

The investigation is at an early stage, and it's unclear whether allegations of wrongdoing will be raised, a source told The Journal. The agency is looking into how Kodak handled the disclosure of the government loan.

Read more: 100 deals and $1 million in profit a year: Here's how Mike Simmons made a simple change to his real-estate investing strategy that took him from small-time house flipper to full-fledged mogul

In a letter on Monday, Sen. Elizabeth Warren called on the agency to investigate "several instances of unusual trading activity prior to the announcement of this deal."

"This is just the latest example of unusual trading activity involving a major Trump administration decision," Warren wrote. The senator cited other letters about possible insider trading of defense stocks and commodities before the administration's strike in Iraq earlier this year.

The Massachusetts Democrat said the rally could have originated from the premature publication of the government loan. The Wall Street Journal reported last Wednesday that stories and tweets from TV stations in Kodak's hometown of Rochester, New York, might have alerted traders to the news. Kodak's trading volume reached 1.6 million shares by the end of the day, well above the average daily volume of 231,000 over the previous month.

Read more: MORGAN STANLEY: The government's recession response has the stock market heading for a massive upheaval. Here's your best strategy to capitalize on the shift.

Warren asked the SEC to look into individuals and corporate entities making large trades of Kodak stock before the announcement, the extent to which such parties were privy to nonpublic information, and whether they shared information about the loan. She also asked the agency to investigate whether Kodak complied with relevant disclosure requirements after early reports announced the deal.

Kodak traded at $15.38 per share as of 12:17 p.m. ET on Tuesday, up 273% year-to-date.

Now read more markets coverage from Markets Insider and Business Insider:

Fund manager Tom O'Halloran quadrupled investors' money in 9 years by betting on super high-growth companies. He explains his approach, and why new technologies could make the next decade even more prosperous than the 2010s.

'The ball is in Congress' court': Chicago Fed president ramps up calls for fiscal support as stimulus talks stall

A new ETF will let investors participate in the stock market's $22 billion SPAC craze