A New York Republican Congressman and his son have been charged with insider trading. U.S. Rep. Chris Collins was a board member for Australia-based Innate Immunotherapeutics. The government charged he used that information to help his son make timely trades.
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A New York Republican Congressman and his son have been charged with insider trading. U.S. Rep. Chris Collins was a board member for Australia-based Innate Immunotherapeutics. The government charged he used that information to help his son make timely trades.
Collins, along with his son, Cameron and the father of Cameron’s fiancée, Stephen Zarsky, all face charges of insider trading, CNBC reported. According to the indictment, Collins “passed nonpublic information” about Innate’s drug trials to his son in order to help him “make timely trades in Innate stock and tip others,” CNBC reported. Information was provided to Zarsky, who in turn shared that information, CNBC said.
Collins turned himself in to the government this morning, Axios reported. However, Collins’ attorneys have promised a vigorous defense to clear the Congressman of the charges, CNBC said. The defense team said the indictment does not suggest that Collins himself traded Innate stocks and believes that will lead to his vindication, CNBC reported.
Collins’ ties to the Australian biotech have been under investigation for some time. He, along with former U.S. Secretary of Health and Human Services Tom Price, were early investors in the company. Investments held by Collins and his family amounted to about 21 percent and gave them a significant voice in the company. As a majority stakeholder, Collins has been key in urging other powerful U.S. lawmakers to invest in the company. Price later sold his shares of Innate prior to being sworn in as HHS Secretary due to potential conflicts of interest. CNBC noted that during Price’s confirmation hearings, he was grilled by the Senate over the Innate tip he allegedly received from Collins.
Not only did Collins reportedly encourage Price to invest, but at least four other Republican lawmakers acquired stock following Collins’ lead. Last year it was reported that Collins bragged about how many millionaires he had made of people due to their investments in Innate.
That braggadocious claim, though, got the Congressman in hot water with his colleagues. Last year, the U.S. House Committee on Ethics initiated a probe of Collins and his involvement with Innate. CNBC noted that “in October 2017, the committee found there is a substantial reason to believe that Representative Collins shared material nonpublic information in the purchase of Innate stock.”
Last summer, Collins lost more than $16 million in a single day when Innate shares plunged following the failure of its lead candidate MIS416. In a mid-stage study, MIS416 failed to show clinically or statistically significant effects in patients with secondary progressive multiple sclerosis.
Collins faces seven counts of securities fraud, conspiracy to commit wire fraud, wire fraud and making false statements. Cameron Collins faces these same charges, and Zarsky faces four counts of securities fraud, conspiracy to commit wire fraud, wire fraud, and making false statements.
