Republican New York Rep. Chris Collins Charged With Insider Trading: DOJ

Republican New York Rep. Chris Collins Charged With Insider Trading: DOJ

Republican New York Rep. Chris Collins Charged With Insider Trading: DOJ

In an investigation into investments in an Australian biotech firm, federal prosecutors have charged Rep. Chris Collins (R-NY), his son, and his son's father-in-law with conspiracy and securities fraud, alleging that they used inside information to shield themselves from major financial losses.

The Congressman, his son, and his son's father-in-law also all face charges of making false statements to the Federal Bureau of Investigation, denying that they had been wrongly given any inside information by Rep. Collins about Innate's drug trial failure.

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.

Prosecutors say that Collins improperly traded on inside information from the Australian drug company Innate Immunotherapeutics Limited, on whose board he served.

In a statement, the congressman's legal counsel addressed the accusations, expressing confidence he will be vindicated and exonerated in court.

Collins, 68, is set to appear in Manhattan federal court Wednesday afternoon.

The charging documents portray a scramble by the congressman and others in the wake of bad news about the drug trial.

The lawyers said Collins will say more on the indictment later on Wednesday.

The trial results were made public a week later, with Innate stock losing 92 per cent of its value in off-exchange trading.

"The crime that [Collins] committed was to tip his son Cameron so that Cameron and a few others could trade on the news while the investing public remained in the dark", Berman said.

The company developed a drug meant to treat Secondary Progressive Multiple Sclerosis. By selling stock before the results of the trial were publicly released, the three men and other unnamed individuals avoided $768,000 in losses.

Collins' trades in Innate Immunotherapeutics had already been the subject of a House ethics probe. Over-the-counter trading continued, however, in the USA, where Cameron Collins' and Zarky's shares were held.

The Office of Congressional Ethics recommended the House ethics committee dismiss a third charge against Collins regarding a discount he received on a private sale of Innate stock because he was a member of Congress. One online trade was made while he was on the phone with his father. "Insider trading is a clear violation of the public trust".

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