New York Congressman Arrested On Insider Trading Charges

Chris Collins

The fraud counts relate to securities of an Australian biotechnology company called Innate Immunotherapeutics, where the congressman served on the board.

The indictment also charged Collins's son, Cameron Collins, as well as Stephen Zarsky, the father of Cameron Collins's fiancée.

The U.S. Attorney's Office in the Southern District of NY alleges that Collins passed along information about Innate Immunotherapeutics, an Australian biotech company at which Collins once sat on the board and owns almost 17 percent of stock.

According to the newly-unsealed indictment, timely sales based on inside information allowed Cameron Collins, Zarsky and others to avoid losses totaling more than $768,000 when the biotech company, Innate Immunotherapeutics, failed a key clinical trial in June of past year.

Chris Collins' lawyers responded swiftly, insisting he will be "completely vindicated".

The pro-Trump politician, who is up for re-election in November, has been a member of Congress since 2013, representing suburban and rural areas around the New York State city of Buffalo.

The congressman will speak to the charges later Wednesday, they said.

The congressman is accused of tipping off his son about the results of Innate's failed drug trial before the results were publicly released in June 2017.

According to the charging documents, in June 2017 Chris Collins passed on information about a failed drug trial so his son, Zarsky and others could make trades. The CEO went on to report that the trial of the company's immunotherapy drug had shown "no clinically meaningful" results compared with a placebo.

The Australia-based biotech company is trying to develop a treatment for multiple sclerosis.

The trades allowed Collins, his son, and Zarsky to avoid $768,000 in losses, according to the indictment.

Attorneys for Cameron Collins said, "We intend to mount a vigorous defense on behalf of our client".

"They could only sell their shares by virtue of the initial tip of inside information by Congressman Collins".

The congressman, through his attorneys, denied any wrongdoing. Shares dropped 92% after the announcement. Cameron is then alleged to have sold the shares - avoiding a loss of approximately $750,000.

Collins' trades in Innate Immunotherapeutics had already been the subject of a House ethics probe. "Insider trading is a clear violation of the public trust".

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