Regulators remain soundly asleep.

It just gets better and better. When Eastman Kodak Company [KODK] announced a “blockchain initiative,” its moribund shares jumped 300% in less than two days, from $3.10 to $12.40. They have since lost some of those gains and closed today, after a 9.5% jump, at $9.20.

But here is how seven of the directors on the board of Kodak paid themselves hefty stock grants the day before the announcement. Regulators remain soundly asleep.

The hype started with the company’s press release at noon on January 9 whose title contained the propitious and expertly chosen, algo-friendly, keyword-rich phrase “Launch Major Blockchain Initiative and Cryptocurrency….” Blockchain and cryptocurrency are the two single biggest keywords of the current Everything Bubble. Nothing even compares.

That’s all it took, and they knew it. And the rest in the press release was just decoration interwoven with blah-blah-blah.

As soon as the news was announced – “Kodak, which just launched its own KodakCoin, a cryptocurrency for photographers,…” – the stock took off.

But on January 8, seven members of the nine-member board of directors awarded themselves together, if my math is correct, 416,726 “Restricted Stock Units” (RSUs), a stock grant. At the peak price of $12.40, those RSUs were worth $5.17 million.

The company disclosed this in a slew of SEC filings on January 10, the day after the “blockchain” hype announcement. The filings also indicate that some of the RSUs have been “disposed of” already.

Note how the blockchain hype was plastered all over the media, and the stock grants have remained buried in SEC filings.

Kodak is just a shadow of its former self. It filed for Chapter 11 bankruptcy in January 2012 and emerged from it in September 2013. It has since been limping along, losing money in 2014 and 2015, making a wee-little profit in 2016, and headed for another net loss for 2017, based on the first three quarters. Revenues in Q3 dropped 8% from a year earlier to $379 million.

Its shares had plunged 80% from July 2016 until the propitious announcement on January 9. Stock options were underwater, and it was time to do something in the bubble-spirit of our times: hence the blockchain-and-cryptocurrency announcement. They knew it was all it would take to get the price of these moribund shares to spike. Blockchain-and-cryptocurrency hype floats all boats.

So seven members of the Board of Directors disclosed via SEC filings on January 10, the day after the announcement, that they had awarded themselves the day before the announcement a combined total 416,726 RSUs:

Executives had already gotten their turn with stock grants and options on December 15, filed with the SEC on December 19, just after UBI Blockchain had gone through its share-price gyrations, including a 1,100% spike in a few days. The SEC has now halted trading in UBI’s shares 11 days after I lambasted the company.

Among the Kodak executives instantly profiting from the 300% spike was notably Sharon Underberg, General Counsel, Secretary, and Senior VP, having on December 15 received 74,627 RSUs plus 174,826 stock options at a conversion price of $3.35. Ka-ching.

These folks are all very knowledgeable in what they’re doing. So I would assume, when challenged one day by the still soundly asleep regulators, that they’d come up with all kinds of logical-sounding reasons why this was perfectly alright, including the always great excuse that they had no idea what CEO Jeff Clarke – who was not given any stock grants or options on those dates – was up to and would announce on January 9 that would cause shares to spike 300%.

Directors are not involved in the day-to-day management of the company, they’d say. They simply had no clue, they’d say. This sort of “plausible deniability” – that all this was just utter coincidence – is a great standby and has helped avert a lot of problems before.

What is fascinating though is the fact that speculators, from algo-driven hedge-fund strategies to retail traders, say in essence: We don’t care, it makes no difference to us whether or not this is a scam, or illegal, or all above board. All we care about is making 300% in two days riding the coattails of even the silliest blockchain-hype announcement. We all know it’s hype and nonsense, but we don’t care as long as we can get out in time and clear 300% in a few days. The fact that people think this way and that this still works is a sign of just how far this bubble has inflated into the ionosphere.

Eleven days after I lambasted UBI Blockchain, regulators woke up. By then, billions had gone up in smoke. Read…  SEC Halts Trading in my Biggest “Blockchain Stock” Hero