Republican Rep. Christopher Collins Indicted on Insider Trading Charges
Federal prosecutors announced an indictment (pdf.) against Rep. Christopher Collins (R-NY) on insider trading charges and lying to the FBI along with his son Cameron Collins and Stephen Zarsky, the father of Cameron’s fiancee.
The charges stem from the “securities of Australian biotechnology company called Innate Immunotherapeutics, where the congressman served on the board.”
The Indictment
The indictment says that “Innate’s primary business was the research and development of a drug called MIS416, which was intended to treat Secondary Progressive Multiple Sclerosis.” The company completed the drug trial in June 2017. The drug gave the company hopes of a massive profit since the market has “few or new alternative treatments” for the disease.
The drug failed the drug trial and Innate’s stock price dropped 92% after the public announcement.
The three men had access to nonpublic information and allegedly used that to their advantage:
In or about June 2017, CHRISTOPHER COLLINS, the defendant, violated the duties he owed to Innate by passing material, nonpublic information regarding the Drug Trial results to his son, CAMERON COLLINS, the defendant so that CAMERON COLLINS could use that information to make timely trades in Innate stock and tip others. CAMERON COLLINS traded on the inside information and passed it to STEPHEN ZARSKY.
The indictment asserts that Collins received the tips as he attended the Congressional Picnic:
The men allegedly took these actions:
The indictment alleges that Rep. Collins then “took steps to prevent the public from learning that” his son sold quite a bit of his shares before the public announcement, including a statement “written in a manner designed to mislead the public into believing that” Cameron did not do it.
U.S. Attorney for the Southern District of New York Geoffrey Berman held a press conference. Here are some snippets:
Collins surrendered this morning in Manhattan and should “appear in federal court in lower Manhattan today in the day.” Collins’s website posted this statement from his attorneys:
“We 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 Therapeutics stock. We are confident he will be completely vindicated and exonerated.Congressman Collins will have more to say on this issue later today.”
Yeah, the indictment says Rep. Collins did not “trade shares himself, in part because he was already under investigation for his relationship with Innate by the Office of Congressional Ethics.” The late Rep. Louise Slaughter (D-NY) asked the House Ethics Committee to investigate Collins in 2017. The committee’s report “did not punish Collins” nor did it “exonerate him.”
Safe Republican Seat
Politico described Collins’s 27th district as “the most Republican in the Empire State and had been considered a reach even as the blue state prepares for a blue wave.” Democratic Governor Andrew Cuomo has set his eyes on flipping the seat despite the stats.
Democrats chose Grand Island Supervisor Nate McMurray to challenge Collins for the seat. Erie County Executive Mark Poloncarz believes Collins’ indictment could swing the seat towards the Democrats and it put the district “on the radar all across the country.”
The Democrats shouldn’t get too excited. The Cook Political Report had the seat as Solid Republican, but the indictment only changed it to Slightly Republican with an R+11 rating
[Featured image via YouTube]
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