A New York congressman and his son were indicted for insider trading related to the shares of an Australian biotechnology firm, federal prosecutors in Manhattan said on Wednesday.
Christopher Collins, a Republican congressman representing the 27th District of New York, his son Cameron Collins, and Stephen Zarsky, the father of Cameron Collins’s fiancée, were charged by federal prosecutors in Manhattan. They believe it to be the first insider-trading case against a sitting congressman.
Collins, who was the first House Republican to endorse Donald Trump for president, is accused of tipping off his son about clinical trial results for a drug being developed by Innate Immunotherapeutics Ltd. to treat a form of multiple sclerosis, information that wasn’t available to the public, according to prosecutors. Collins served on the board of the company and is among its largest shareholders.
His son then passed the news to his girlfriend, his girlfriend’s mother, Zarsky and a friend, prosecutors said. During the four days between the time Collins learned about the negative drug trial and when it was announced publicly, they and others sold more than 1.78 million Innate shares, avoiding losses of about $768,000, prosecutors said.
Collins, who has previously come under fire for investing in Innate while sitting on a House committee that oversees health-care policy, isn’t accused of selling shares based on the negative drug trial.
“We will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name,” said Jonathan Barr and Jonathan New, attorneys for Collins. “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.”
Officials at Innate Immunotherapeutics couldn’t be located for comment.
The U.S. Attorney for the Southern District of New York scheduled a news conference to formally announce the charges.
Collins got the news of the drug trial in a June 2017 e-mail from the company’s chief executive officer while attending an event on the South Lawn of the White House. “I have bad news to report,” the email said. 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.