First Trump Endorser Rep. Chris Collins Charged With Insider Trading – While At The White House
Rep. Chris Collins (R-N.Y.), the first member of Congress to support President Donald Trump during his campaign, has been charged with insider trading and lying to federal agents.
Federal prosecutors charged Collins, who sits on the board of a small drug maker based in Australia, Innate Immunotherapeutics Limited, with passing confidential information to family members. Collins, his son, Cameron Collins, and his fiancé’s father, Stephen Zarsky, are additionally charged with lying to federal agents about allegations of insider trading. The Securities and Exchange Commission is also seeking to prohibit Collins from serving as a officer or director of a public company.
Rep. Collins was at the Congressional Picnic at the White House last summer when he received an email from the CEO of Innate, in which he and his family was heavily invested. The email said that the company’s only product, an experimental treatment for multiple sclerosis, had just failed a do-or-die scientific trial, the New York Times reported. Within one minute after responding to the Innate CEO, Collins was calling his son to tell him that the drug had failed its trial, which was “material, nonpublic information… in breach of Collins duties to Innate,” the indictment reads.
According to the prosecutors, Collins’s son then traded on the insider information and passed it to Zarsky, who tipped off at least three others. The defendants avoided over $768,000 in losses by trading ahead of the public announcement of the failed drug trials.
“He placed his family and friends above the public good,” Geoffrey Berman, the U.S. attorney for the Southern District of New York, said about Collins on Thursday. “Congressman Collins, who by virtue of his office helps to write the laws of our nation, acted as if the law did not apply to him.”
After the indictment was announced, House Speaker Paul Ryan removed Collins from the House Energy and Commerce Committee while the matter is pending. “Insider trading is a clear violation of the public trust,” Ryan said in a statement.
Later Wednesday, at a news conference in Buffalo, N.Y., Collins said his investments in Innate came before he was elected to Congress and that he suffered substantial losses when the company’s stock plunged. He denied that he had broken any laws, calling the charges against him “meritless.”