I-Team: How Rep. Collins' alleged insider trading scheme worked

Congressman denies he broke the law

BUFFALO, N.Y. (WKBW) - This is how prosecutors from the U.S. government say an alleged insider trading scheme by Rep. Chris Collins and others worked. None of these allegations have been proven in a court of law and Collins' lawyers say they plan to mount a vigorous defense.

Thurs., June 22, 2017 -- Congressman Chris Collins, while at the White House, learns “devastating” information about the failure of a drug trial from the CEO of Innate Immunotherapeutics, an Australian biotech firm on whose board he serves. The information was “material, nonpublic” information and was supposed to remain confidential.

“Wow. Makes no sense,” Collins responds to the email. “How are these results even possible???”

15 seconds later -- Collins calls his son, Cameron Collins, six times before reaching him on the seventh call. They speak for six minutes and Rep. Collins is alleged to have “tipped his son with the expectation he would trade.”

90 minutes later -- Cameron Collins drives with his girlfriend to their parents’ home. “Within minutes” of their arrival, the girlfriend’s mother takes steps to sell her Innate shares, including calling her brokerage firm.

Friday, June 23 -- Before markets open, Cameron Collins, his girlfriend and Stephen Zarsky “quickly took steps” to begin selling their Innate shares. Zarsky “began calling friends and relatives” and “tipping” them to sell their shares, telling his sister “not to ask him why.”

Cameron Collins sold many of his shares “shortly after telephone calls” with Rep. Chris Collins and in one case while was still on the phone with his father.

Monday, June 26 -- Cameron Collins “tipped” a friend who previously bought shares “on his recommendation.” Five minutes later, the friend places an order to sell all of his Innate shares. 

That evening -- Innate announces the negative results of the drug trial to the public. The next trading day, the share price plummets more than 90 percent, from 45 cents to 3 cents. 

Cameron Collins, Stephen Zarsky “and their tippees” avoid losing $768,600 through the alleged insider trading. Collins himself reportedly lost $17 million on the investment.

April 25, 2018 -- Rep. Collins was interviewed by an FBI agent and stated “that he did not tell Cameron Collins...the drug trial results before the public announcement.” Rep. Collins and his son are accused of lying to federal investigators, which is a crime.

Source: Federal complaint and indictment, U.S. Attorney for the Southern District of New York
 

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