Congressman Collins charged with insider trading
NEW YORK (Reuters) - Christopher Collins, a Republican U.S. congressman from New York who was one of President Donald Trump’s earliest supporters, was charged on Wednesday with insider trading concerning a drug trial at an Australian biotechnology company on whose board he served.
FILE PHOTO: U.S. Representative Chris Collins is interviewed during the 2017 "Congress of Tomorrow" Joint Republican Issues Conference in Philadelphia, Pennsylvania, U.S. January 25, 2017. REUTERS/Mark Makela/File Photo
The indictment came as Collins, 68, was seeking a fourth two-year term. Democrats consider him vulnerable in November’s elections, where they hope to recapture the House of Representatives.
Lawyers for Collins, Jonathan Barr and Jonathan New, said in a statement provided by the congressman’s office they were confident he would be “completely vindicated and exonerated,” and that they will “mount a vigorous defense to clear his good name.”
The indictment charges Collins, his son Cameron, and Stephen Zarsky, the father of Cameron Collins’ fiancée, with securities fraud, wire fraud and other counts. All three also face civil charges by the U.S. Securities and Exchange Commission.
Lawyers for the other defendants did not immediately respond to requests for comment. All three defendants were expected to appear in the U.S. District Court in Manhattan later Wednesday.
The case related to Innate Immunotherapeutics Ltd (IIL.AX), where Christopher Collins sat on the board and held a 16.8 percent stake.
Collins was accused of having told his son in June 2017, not long after receiving an email from Innate’s chief executive, that the company’s trial for its MIS416 drug intended to treat secondary progressive multiple sclerosis had failed.
The indictment said Cameron Collins then passed news about the trial to Zarsky, and that tips were later given to six of Cameron Collins’ or Zarsky’s friends or family members.
Authorities said more than 1.78 million Innate shares were sold based on the tips before the company announced the drug trial results on June 26, 2017.
They said this enabled the defendants and the tippees to avoid more than $768,000 of losses when Innate’s share price plunged the next day to 3.5 cents from 45 cents.
Innate, which is based in Sydney, did not immediately respond to a request for comment outside business hours.
Collins represents New York’s 27th Congressional District, which includes areas surrounding Buffalo and Rochester in the northwestern part of the state.
The criminal case is U.S. v Collins et al, U.S. District Court, Southern District of New York, No. 18-cr-00567.
Reporting by Jonathan Stempel and Brendan Pierson in New York; Editing by David Gregorio, Howard Goller and Jonathan Oatis
Our Standards:The Thomson Reuters Trust Principles.