Rep. Christopher Collins (R-NY) was charged with participating in an insider-trading scheme to sell shares of an Australian biotechnology company before the public disclosure of a failed drug trial. Federal prosecutors in Manhattan accused Collins, 68, of tipping off his son last summer about the results of a multiple-sclerosis drug trial completed by Innate Immunotherapeutics Ltd. , a biotechnology company based in Sydney, the Wall Street Journal reports. Collins was a member of Innate’s board of directors and one of the company’s largest shareholders, holding 16.8 percent of its stock, the indictment said. Collins, who serves the 27th district near Buffalo and Rochester, was the first member of Congress to endorse Donald Trump in 2016. Collins’s stature grew after Trump won the GOP nomination.
The indictment says Collins passed the confidential results to his son, Cameron Collins, so he could trade on the tip. Prosecutors say his son sold nearly 1.4 million Innate shares and gave the information to at least four people, including his fiancée and her father, Stephen Zarsky. Zarsky then sold all of his Innate shares and shared the tip with at least three other individuals, including his brother and sister, before the public release of the trial results, according to the indictment. Innate announced the failed drug trial after U.S. markets closed on June 26, 2017. The next day, Innate’s stock dropped more than 90 percent. In total, the trades allowed the defendants and alleged co-conspirators to avoid more than $768,000 in losses, the indictment said. Collins said he would remain on the ballot in November.