New York Congressman Chris Collins Charged With Insider Trading
Republican U.S. Rep. Chris Collins of western New York state has been indicted on charges that he used inside information about a biotechnology company to make illicit stock trades.
Collins, whose district covers parts of western New York between Buffalo and Rochester, has denied any wrongdoing.
The charges were announced and the indictment unsealed in New York City on Wednesday.
The indictment charges Collins, the congressman’s son and the father of the son’s fiance, with conspiracy, wire fraud and other counts.
Prosecutors said the charges relate to a scheme to gain insider information about Innate Immunotherapeutics Limited, a biotechnology company headquartered in Sydney, Australia, with offices in Auckland, New Zealand.
According to the indictment, Collins, 68, got early word that a drug the company developed to treat multiple sclerosis wasn’t performing well in a medical trial and passed on the tip to his son, Cameron.
Collins, whose district covers parts of western New York between Buffalo and Rochester, has denied any wrongdoing. When the House Ethics Committee began investigating the stock trades a year ago, his spokeswoman called it a “partisan witch hunt.”
“We will answer the charges filed against Congressman Collins in court and will mount a vigorous defense to clear his good name,” his attorneys, Jonathan Barr and Jonathan New, said in a statement Wednesday. “It is notable that even the government does not allege that Congressman Collins traded a single share of Innate Therapeutics stock. We are confident he will be completely vindicated and exonerated.”
STATEMENT: Attorneys for Rep. Collins Respond to Charges Filed Today https://t.co/rzNnUmyJDd
— Rep. Chris Collins (@RepChrisCollins) August 8, 2018
All three defendants were in federal custody Wednesday and expected to make their initial court appearance in the afternoon.
Collins was a member of Innate’s board of directors and held nearly 17 percent of the stock. When the drug trials failed, the public announcement caused the stock price of Innate to plunge 92 percent.
Prosecutors allege that Collins passed along secrets to his son in June 2017. They say Cameron Collins traded on the inside information and passed it to a third defendant, Stephen Zarsky. They say Zarsky traded on it and tipped off at least three others.
Prosecutors say the three avoided over $768,000 in losses by trading ahead of the public announcement of the failed drug trials.
The advocacy group Public Citizen filed a request for an investigation of Chris Collins’ stock dealings with the Office of Congressional Ethics and the Securities and Exchange Commission in January of 2017.
Several other members of Congress have come under scrutiny for purchasing shares of Innate Immunotherapeutics, including then-Rep. Tom Price, R-Ga. Price went on to become President Donald Trump’s first secretary of the Health and Human Services Department.
Democrats made an issue of Price’s purchase at his Senate confirmation hearings in early 2017, after the Wall Street Journal reported that company officials said Price was allowed to buy the stocks at a low price.
Price, who bought about 400,000 shares of the stock, said he’d learned of the firm through Chris Collins but testified that the price he received was available to any investor.
Price resigned as health secretary under criticism for taking pricey charter flights at taxpayers’ expense.
Chris Collins was first elected to Congress in 2012. He faces re-election this fall.
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