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Congressman Collins to remain on November ballot despite insider trading charges

Posted: 12:21 PM, Sep 17, 2018
Updated: 2018-09-17 22:21:50Z

Rep. Chris Collins will remain on the November ballot for re-election to his 27th Congressional District seat despite facing charges of insider trading. 

At a noon news conference, Erie County GOP Chairman Nick Langworthy said Collins and his legal team informed him this morning that it was no longer in the best interest of the congressman and his legal defense to remove his name from the ballot and Langworthy would not have Collins' cooperation in doing so. 

"We had no reason to expect this," Langworthy said. "This comes as a disappointment."

A statement from Collins' legal team said the decision is based on the legal process.

"Because of the protracted and uncertain nature of any legal effort to replace Congressman Collins we do not see a path allowing Congressman Collins to be replaced on the ballot," said attorney Mark Braden. 

Last month, Collins announced he was suspending his re-election campaign, saying he would close out the remaining months of his term "to assure that our community maintains its vote in Congress to support President Trump's agenda to create jobs, eliminate regulations, reduce the size of government, address immigration and lower taxes."

 

Collins has a campaign war chest of $1.3 million.

 

Collins, his son Cameron and the father of Cameron Collins' fiancee have all pleaded not guilty to charges of insider trading following their indictment on August.

A complaint filed in the United States District Court, Southern District of New York by the U.S. Securities and Exchange Commission accuses Cameron Collins of selling large amounts of stock in Innate Immunotherapeutics, Ltd. before relevant information about a clinical trial was made public. Chris Collins is accused of giving his son the information.

The complaint indicates on June 22, 2017, Chris Collins, a member of Innate's board of directors, received an email from the company's CEO. The email was sent to all board members. It detailed "extremely bad news" about a clinical trial for a drug called MIS416, a multiple sclerosis drug.

Fifteen seconds after receiving the email, the complaint says Collins called his son Cameron. They spoke for six minutes. In the next two trading days, Friday June 23 and Monday June 26, Cameron Collins sold nearly 1.4 million shares of Innate.

Information on the clinical trial was not made public by Innate until Monday evening. Before the information was made public, court documents indicate Cameron Collins told the following people about the trial results:

  • his girlfriend
  • Stephen Zarsky, also charged, father of Cameron's girlfriend
  • his friend

Stephen Zarsky is accused of delivering the information to his brother and his friend before the information was made public.

According to the court filing, Cameron Collins, Stephen Zarsky, and the above family and friends placed orders to sell Innate stock before the trial results were made public on the evening of June 26, 2017.

The following trading day, Innate shares dropped 90%, from $0.45 to $0.0351.

The SEC says the involved parties sold 1.78 million Innate shares before the results of the trial on MIS316 were made public. They avoided $768,600 in total losses.

Chris Collins remains the second largest shareholder in Innate, owning 9.24% of the company's shares.

In a statement the day he announced he was suspending his re-election campaign, Collins said he would "continue to fight the meritless charges brought against me and I look forward to having my good name cleared of any wrongdoing."

In the days after Collins announced he was not running for re-election, more than a dozen people announced they would run for his seat or showed interest in doing so. GOP leaders from counties across the 27th District have met in recent weeks with interested candidates. 

But the decision announced today means Collins will face Grand Island Supervisor Nate McMurray, a Democrat, in November. 

In a statement following Langworthy's news conference, McMurray said the following:

"Well it's nice to finally know who I'm running against. But, in truth, we always knew we were running against Chris Collins. There are laws for a reason. There is accountability in our society for a reason. And in the greatest democracy in the world, voters weren't going to take this kind of sham switching around names ont he ballot at the whims of local party bosses. I credit the people of Western New York for standing up in town after town saying 'don't force him on the ballot in my town.' They saw through this fraud. They weren't going to fall for the bait and switch strategy by the same team that endorsed, celebrated, took pictures with and defended Chris Collins." 

The Democratic Congressional Campaign Committee Communications Director Meredith Kelly also released a statement Monday afternoon:

“In an attempt to end a devastating news cycle following Congressman Chris Collins’ indictment, Republicans immediately vowed that they would get their scandalized Congressman off the federal ballot, but we now know that this wasn’t true. In the most stark sign that House Republicans are a corrupt and unethical body only out to benefit themselves and their special interests, there are now two indicted Republicans on the ballot in November. The voters of New York 27th Congressional District now have the clearest of choices between scandal-plagued Chris Collins and Nate McMurray, who will be a real fighter for the families of Western New York, and the stakes just got a whole lot higher on November 6th.”

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