Republican congressman is arrested by the FBI on insider trading charges

Republican Rep. Chris Collins of New York, who was Donald Trump’s leading supporter on Capitol Hill during the 2016 election, has been charged with alleged securities fraud, wire fraud, false statements, the Justice Department announced Wednesday.  

Collins faces insider trading charges along with his son, Cameron Collins, and Stephen Zarsky, the father of Cameron Collins’ fiancée.

He has reportedly surrendered to the FBI.  

The lawmaker is charged with passing insider information to his son so Cameron Collins ‘could make timely trades in Innate stock and tip others,’ according to the indictment. 

Rep. Chris Collins was one of President Trump’s biggest supporters on Capitol Hill

Rep. Collins is under federal indictment in New York for insider trading

Rep. Collins is under federal indictment in New York for insider trading

The case is related to Australian biotech company Innate Immunotherapeutics, where Collins holds stock.

Innate’s primary work was on a drug to help suffers of multiple sclerosis. 

That drug, MIS416, had the potential for billions in profit because of a lack of treatment for the disease.

It failed its drug trial, however, and in June of 2017, Collins suffered a paper loss of $16.7 million when the company’s stock tanked 92 percent largely due to that incident.

The CEO of Innate had emailed stock holders – including Collins – on June 22 to inform them of the failed drug trial, writing ‘I have bad news to report.’

The email noted the drug tests showed ‘no clinically meaningful or statistically significant differences’ in the outcomes between MIS416 and a placebo.

Collins was attending the Congressional Picnic at the White House when he receive the message, according to the indictment, and responded: ‘Wow. Makes no sense. How are these results even possible?’ 

But he was unable to trade his Innate stock for ‘practical and technical reasons,’ the indictment states, as he was under investigation by the Office of Congressional Ethics for his ownership of the shares and because the shares he ownedwere held under the Australian stock exchange, which has already placed a hold on sales of Innate stock.

But Cameron Collins could sell the stock he owned in the company. The next morning Cameron called his brokerage firm at 7:42 am and traded over 16,000 shares in stock.  Later that day he placed 17 additional orders to sell Innate stock. 

Federal investigators showed there were multiple calls between the two Collins during this time period.

In total, Cameron Collins sold almost 1.4 million shares in Innate stock between June 23 and June 26, when Innate publicly announced its drug had failed in the testing stage.

Cameron Collins also met with Zarsky during that time period. Zarsky sold his shares and contacted relatives who owned stock in the company.

According to the indictment, the trades the younger Collins engaged in proceeded the public release of the negative drug trial and ‘were timed to avoid losses that they would have suffered once that news became public.’

The three men – the two Collins and Zarksy – avoided $768,000 in losses with those trades, the government alleges.

Rep. Collins also issued statements to the press during that time to cover up the stock sales, the indictment charges. 

Attorneys for Collins said in a statement to CNN that they ‘will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name.’

‘It is notable that even the government does not allege that Congressman Collins traded a single share of Innate (Immunotherapeutics) stock. We are confident he will be completely vindicated and exonerated,’ the statement noted. 

Four other Republican House members — Reps. Markwayne Mullin of Oklahoma, Billy Long of Missouri, Mike Conaway of Texas, and Doug Lamborn of Colorado — owned stock in the company.

Tom Price, the congressman turned Health and Human Service Secretary, also owned stock in Innate. 

Rep. Collins is charged with insider trade deals that helped him avoid almost $800,000 in loses

Rep. Collins is charged with insider trade deals that helped him avoid almost $800,000 in loses

Mullin’s office told the DailyMail.com that the congressman learned of Innate when it became ‘a newsworthy topic.’ He decided to invest in Innate ‘only after doing his own personal research of the company.’ 

The non-partisan Office of Congressional Ethics investigated Collins’ stock in the company and whether it was a conflict of interest with his work on Capitol Hill.

In July, the House Ethics Committee announced it was reviewing Collins’ stock ownership.

‘There is a substantial reason to believe that Representative Collins shared material nonpublic information in the purchase of Innate stock, in violation of House rules, standards of conduct, and federal law,’ according to the Office of Congressional Ethics released last fall.

After Collins became a member of Congress in 2013, he began working on the 21st Century Cures Act. 

That legislation, which became law last year, includes a provision Collins authored that speeds the drug approval process for companies like Innate.

But he argued there is no conflict of interest between his investment in the firm – which gives him about a 17 percent ownership stake in the company – and his work on the measure because Innate didn’t have any business before the federal government.

His office also argued the company answers to Australian and New Zealand regulators and American authorities.

Collins has insisted his shares in Innate are about saving the lives of people with multiple sclerosis, not making money.

‘What we’ve done and what we are doing is life changing and life-saving for potentially millions,’ he told the Rochester Democrat and Chronicle last year. ‘I’m so proud of what this company is doing and without me, it wouldn’t exist. When they write my epitaph, it’s going to say Innate Immunotherapeutics, saving millions of lives. It’s not going to be member of Congress.’

 

 

 



Read more at DailyMail.co.uk