Rep. Chris Collins, his son Cameron and the father of Cameron Collins' fiancee have all pleaded not guilty to charges of insider trading. The three were arraigned in Federal Court in Manhattan Wednesday afternoon. Bail was set at $500,000, each.
Rep. Collins is set to hold a news conference at 6:30pm on Wednesday at the Embassy Suites in Buffalo.
Rep. Collins and his co-defendants surrendered to the F.B.I in Manhattan Wednesday morning.
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.
15 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, 6/23 and Monday, 6/26, 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, attorneys for Chris Collins, Jonathan Barr and Jonathan New of BakerHostetler wrote:
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.
In October of last year, 7 Eyewitness News reported that Collins was being investigated for his ties to an Australian cancer research company by the U.S. House Ethics Committee, following a recommendation from the Office of Congressional Ethics, (OCE) a nonpartisan entity. Collins, who owns stock in the company, was accused of using non-public information to purchase stocks, which is a federal crime.
The OCE reviews allegations of misconduct, referring matters to the House Committee on Ethics.
MORE on #Collinsarrest: According to criminal complaint, @RepChrisCollins began unloading Innate Immunotherapeutics, Ltd. (“Innate”) stock after learning "nonpublic info" that a clinical trial had failed. @WKBW pic.twitter.com/YRZuerxKe6
— Ali Touhey (@Ali2e) August 8, 2018
Collins was also accused of requesting a worker of the National Institutes of Health to meet with the cancer research company to talk about clinical trials.
In October, Collins responded, "Throughout my tenure in Congress I have followed all rules and ethical guidelines when it comes to my personal investments."
Collins, who represents the 27th district of New York, is up for reelection this November against Democratic candidate Nate McMurray.
The full complaint is attached below.
Collins and the two co-defendants are expected back in court on October 11.
This is a breaking news story. We will have more information as it becomes available.