US congressman Chris Collins indicted for insider trading
NEW YORK, USA (UPDATED) – US House Republican and Trump loyalist Chris Collins, who has been indicted by federal prosecutors for securities fraud, remained defiant Wednesday, August 8, as he vowed to clear his name and secure re-election.
Collins was arrested and charged along with his son Cameron Collins and another defendant for their role in illegal trading of stock in Australian biotech firm Innate Immunotherapeutics, where the elder Collins was a board member, according to the indictment, which was just unsealed.
"As I fight to clear my name, rest assured I will continue to work hard for the people and constituents of the 27th Congressional District of New York, and I will remain on the ballot running for re-election this November," he told a press conference late Wednesday.
Collins, 68, "tipped his son to confidential corporate information at the expense of regular investors. And then he lied about it to law enforcement to cover it up," according to Geoffrey Berman, the US Attorney for the Southern District of New York.
Cameron Collins then used the insider information "to make timely trades in Innate stock and tip others," the indictment alleges.
Among the charged co-conspirators was Cameron's fiancee's father, Stephen Zarsky.
Innate had been developing a drug to treat multiple sclerosis, but in June 2017 the drug's clinical trial was declared a failure.
As a board member, Collins was informed of the "extremely bad news" by the company's chief executive before the findings were publicized.
Collins was a major investor in the company, owning millions of dollars' worth of its stock.
He himself did not trade any of his holdings ahead of the negative report's publication, in part because he was already under investigation by the Office of Congressional Ethics regarding his holdings.
His stock ultimately declined by millions of dollars in value when the share price plummeted by 92% one day after the trial results were released, federal prosecutors said.
But he knowingly broke the law by alerting his son to the privileged data before its publication, it added.
The trades allowed Cameron Collins, Zarsky and others "to avoid over $768,000 in losses that they would have otherwise incurred" if they sold the stock after the announcement, according to the indictment.
Lawyers for the congressman insisted he had done nothing wrong and would be "completely vindicated."
Collins told reporters he was "proud" of his affiliation with Innate.
"I may have lost most of the money that I invested in the company, but I took the chance to bring relief to those who deal with the dreadful disease of secondary progressive MS every day," he said.
"The charges that have been levied against me are meritless, and I will mount a vigorous defense in court to clear my name."
Collins, who represents Buffalo's suburbs and other counties in western New York, was the first House Republican to openly support Trump's bid for the party's nomination in the 2016 race, and he has remained loyal to the president.
House Speaker Paul Ryan said the allegations demand a "thorough investigation."
But he stopped short of a harsh reprimand, stating only that Collins will be removed from the House Energy and Commerce Committee.
Democrats have long sought to portray the Trump-era Republican Party as corrupt, and the opposition leadership pounced on Wednesday's news.
"The American people deserve better than the GOP's corruption, cronyism, and incompetence," House Minority Leader Nancy Pelosi said, as she called for new laws that would "crack down on the self-dealing that has metastasized under the GOP Congress and the Trump Administration." – Rappler.com