Rep. Chris Collins pleads not guilty to federal charges for insider trading, lying to FBI
Washington, D.C. (WHAM) - Western New York Congressional Representative Chris Collins is being charged with insider trading and lying to the FBI, according to a federal criminal complaint.
Collins was charged, along with his son Cameron Collins and Stephen Zarsky, the father of Cameron's girlfriend, with insider trading-related charges. The charges were filed with the U.S. Securities and Exchange Commission on Wednesday morning. All three men surrendered to the FBI Wednesday morning.
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In June 2017, Collins was on the board of an Australian biotech firm called Innate Immunotherapeutics. The federal complaint alleges he learned on June 22 that clinical trial test results for a drug intended to treat multiple sclerosis were a "clinical failure."
According to court paperwork, Collins then immediately got in touch with his son Cameron over the phone. Over the next two business days on June 23 and 26, Cameron Collins sold nearly 1.4 million shares of Innate stock based on the information he received from his father. Previously, he had owned 5.2 million shares of the company stock. During that time period, the two spoke at least nine times.
The complaint also alleges that Cameron Collins spoke with his girlfriend and several of her relatives, advising them to sell their shares of Innate stock.
When the news of the clinical trial became public on June 27, shares of Innate stock plummeted more than 90 percent.
By selling their shares ahead of the news, Cameron Collins and everyone who was tipped off ahead of the news avoided losing approximately $768,600, according to court paperwork.
Collins (R, NY-27) has been in office since 2013. He is currently seeking his third term in office.
Attorneys Jonathan Barr and Jonathan New, Baker Hostetler released a statement on behalf of the Congressman.
"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."
Gates Town Supervisor and fellow Republican Mark Assini said if Collins is guilty, he has to go.
"It's a sad day - certainly for the Collins family - but whether you are a Democrat or Republican, if you are involved with illegal activity, you have to be prosecuted to the full extent of the law," Assini said. "Of course he is innocent until proven guilty. But frankly after we had the majority leader of the Senate and the Speaker of the Assembly convicted of fraud and bribery, to have something like this happen...I like Chris Collins, but if he was involved in conspiracy, then he's got to pay the price."
Other Republican lawmakers in the Rochester and western New York area said they are not commenting yet on the charges.
House Speaker Paul Ryan (R-WI) issued a statement following the allegations against Collins, adding that Collins would no longer be serving on the House Energy and Commerce Committee until the allegations are settled.
“While his guilt or innocence is a question for the courts to settle, the allegations against Rep. Collins demand a prompt and thorough investigation by the House Ethics Committee. Insider trading is a clear violation of the public trust."
Chris Collins , Cameron Collins, and Stephen Zarsky each pleaded not guilty to the charges. Bail was set at $500,000 each
A federal judge ordered all three men to restrict travel within the United States and surrender any firearms to local authorities. Rep. Collins will be required to surrender his diplomatic passport.
Federal prosecutors said discovery will largely consist of trading records, bank statements, phone records, and search warrants.
The next hearing related to the case is scheduled for October 11.