New York Congressman Chris Collins Arrested on Insider-Trading Charges

08 August, 2018, 22:46 | Author: Sue Mclaughlin
  • Rep. Chris Collins R-NY. speaks in Cleveland

The stock price rose as media reported on the men's holdings in the Australian company.

The case relates to Innate Immunotherapeutics Ltd (IIL.AX), where Christopher Collins sat on the board and held a 16.8 percent stake.

It had the potential to be a big moneymaker for the company since there aren't many treatments available for the disease. At the time of his purchase, Innate was described as "a tiny pharmaceutical company from Australia that has no approved drugs and no backing from flashy venture capital firms". It didn't show any promise in treating the disease.

The report details how Collins met with officials at the National Institutes of Health to discuss the development of a drug made by Innate, a company whose board he served on.

The lawyers said Collins will say more on the indictment later on Wednesday. "Makes no sense. How are these results even possible???"

For years, Collins' relationship to Innate raised concerns in the Capitol.

According to the indictment, Collins immediately called his son and told him the news.

His son then passed the news to his girlfriend, his girlfriend's mother, Zarsky and a friend, prosecutors said. Over-the-counter trading continued, however, in the US, where Cameron Collins' and Zarky's shares were held.

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But the test results, received by Innate on June 22, 2017, "pretty clearly indicate [d] clinical failure", according to an email sent by the company's CEO that was cited in the indictment.

The report says Collins has been arrested on the charges and his co-defendants include his son Cameron Collins, and the father of his fiancee, Stephen Zarsky. "They could only sell those shares on the initial tip of inside information by Congressman Collins".

The congressman spoke to the Federal Bureau of Investigation on April 25, 2018.

Within minutes, Chris Collins phoned his son and relayed the information "knowing that it was in breach of his duties to Innate and anticipating that Cameron Collins would use it to trade and tip others", the documents state.

The charges were announced against Collins, a staunch supporter of U.S. President Donald Trump who is up for re-election in November.

The defendants are accused of multiple counts of securities fraud, as well as one count of wire fraud, one count of conspiracy to commit wire fraud and one count each of making false statements.

In a statement to CNBC, attorneys for Collins vowed to "mount a vigorous defense to clear his good name".

On a 2014 financial disclosure form, Collins said he hadn't participated in any IPO - but he was technically covered thanks to a loophole that requires members of Congress to disclose when they're involved only in US IPOs, not foreign ones, the Daily Beast noted.

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