Upstate New York Congressman Chris Collins arrested on federal insider trading charges

New York Daily News ^ | Aug 08, 2018 | Rich Schapiro

[yesthatjallen]

Insider trading was a family affair for upstate New York congressman Chris Collins, federal prosecutors charged Wednesday.

The Republican lawmaker, one of President Trump’s earliest supporters, was charged along with his son Cameron Collins and the father of Cameron’s fiancée, Stephen Zarsky, in a scheme that allowed them to avoid $768,000 in stock losses, prosecutors say.

The trio are accused of securities fraud related to Innate Immunotherapeutics, an Australian biotechnology company. The elder Collins sits on the firm’s board of directors and is one of its largest shareholders.

Manhattan federal prosecutors say the upstate New York congressman passed to his son confidential information that a new multiple sclerosis drug had failed a medical trial.

Armed with the insider tips, Cameron Collins was able to “make timely trades in Innate stock and tip others,” the indictment says.

Cameron Collins handed off the information to his fiancee’s father, who also made stock trades and passed on the tip to others, prosecutors say.

The public announcement of the failed drug trials caused the Innate stock price to plummet 92%.

“All of the trades preceded the public release of the negative drug trial results, and were timed to avoid losses that they would have suffered once the news became public,” the indictment says.

The defendants are expected to appear in Manhattan Federal Court Wednesday afternoon to face charges of conspiracy, wire fraud and other counts.

Collins’ attorneys released a statement defending the Republican lawmaker.

"We will answer the charges filed against Congressman Collins in court and will mount a vigorous defense to clear his good name,” said lawyers Jonathan Barr and Jonathan New. “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.”

Collins found out about the drug trial failure in an email from Innate’s CEO on the night of June 22, 2017, the indictment says.

The congressman replied to the CEO 15 minutes later. “ Wow. Makes no sense,” he wrote. “How are these results even possible???”

Then Collins and his son traded six missed phone calls over the next four minutes. They finally connected a minute later in a call that resulted in Chris Collins sharing the news of the failed drug trial with his son, the indictment says.

The next morning, Cameron Collins sold 16,508 shares of Innate stock. He sold additional shares in the subsequent hours and days after conversations with his father, the indictment says.

In total, he sold nearly 1.4 million shares of Innate stock between June 23 and June 26. The dumping of his shares allowed him to avoid roughly $570,900 in losses, the indictment says.

Chris Collins did not trade any stocks himself and his holdings ultimately lost millions of dollars in value once the drug trial results were made public. Prosecutors say Collins was blocked from making his own trades because he was under investigation by the Office of Congressional Ethics and his shares were held in Australia where a halt was put on any Innate share buys or sells.

The congressman’s office later released a misleading statement to reporters that suggested his son had not sold any Innate shares prior to the public announcement of the drug trial, the indictment says.

Chris Collins himself made his opinions on the matter clear in an email about press coverage of Innate. “We want this to go away,” he wrote, according to the indictment.

Allegations of suspicious stock trades have dogged Chris Collins for more than 18 months. With Collins leading the charge, Congress passed legislation that could benefit experimental drug makers such as Innate Immunotherapeutics.

“Do you know how many millionaires I’ve made in Buffalo the past few months?” Collins was overheard saying into his cell phone off the House floor in early January 2017.

Chris Collins, whose district covers parts of western New York between Buffalo and Rochester, isn’t the only high-profile Republican who has made a mint selling shares of Innate stock.

Former Health and Human Services Secretary Tom Price more than tripled his investment when he sold his shares in the company in Feb. 2017, raking in at least $225,000, according to public records.

A spokeswoman said Price, then a GOP congressman from Georgia, learned about the company from Collins.

[GuavaCheesePuff]

Corrupt.

[allendale]

Cicero was insightful. He warned people to recognize politicians for what they are, not what you project or hope them to be.

[pt17]

If guilty, toss his butt in prison for a decade or so and then go looking for all the other congress critters making money on insider information.

[SkyPilot]

I am still trying to digest this news.

Most members of Congress engage in Insider Trading, all the time.

It is one of the primary vehicles by which many members enter office with little net worth, and on a salary of $174,000, leave office a few years later worth tens of millions of dollars.

Was this case just too blatant for the Dept of Injustice to ingore? Was this a message being sent to members of Congress that the noose is tightening via President Trump?

The former Speaker of the House, John "Wiskey" Bohner told the press that Insider Trading laws "didn't apply" to members of Congress.

https://theintercept.com/2015/05/07/congress-argues-cant-investigated-insider-trading/

[yesthatjallen]

If the charges prove to be true he was foolish to have done it and foolish to believe he could get away with it.

Do these people not understand as public political figures they're being watched by hawks ready to strike?

I'm not a public figure but even I try to not to do anything that can be misconstrued as illegal.

[PGR88]

Its why I tend to vote for strong ideologues and people who are ready to sacrifice their career to change Fed.gov

Collins is a fairly reliable conservative, but was also clear running for Congress was the next prize and goal, in what was a very successful business career.

[flamberge]

Corrupt.

Yes.

But it is only a crime when Republicans do it.

Democrat Congressman are said to have made stock trades from the floor of the House while votes are in progress. That seems to go unprosecuted, and unnoticed by the media.

But a Republican - and a Trump supporter? The entire force of Government bureaucracy gets marshaled to hang them.

Selective enforcement is what we have.

[Zhang Fei]

This is the first prosecution I’ve heard of since the STOCK Act was passed criminalizing insider trades for Congresscritters and their staff.
https://en.wikipedia.org/wiki/STOCK_Act

[Zhang Fei]

Have to wonder whether the STOCK Act is responsible for many Congressional retirements, since they can no longer make a bundle from insider trades. I expect a good number can make more money in the private sector, once insider trading is eliminated.

[Ann Archy]

WHEN is DIFI going to be ARRESTED?? Oh Never, she's a Jewish woman Democrat!!

Democrats are LAW-LESS because Republicans are BALL-LESS!

[entropy12]

But do they sit next to DJT in TV news video’s and have been ardent supporters the moment he announced his run? Have you not noticed M.O. of Mueller? Since he can’t find anything to charge DJT with, he is placing anyone associated with Trump under microscope. It is the older than hills method prosecutors have used for a century or more.

Good thing there are no pictures of me with DJT, because I may have rounded off savings account interest incorrectly. And I did get 3 traffic violation tickets in Chicago 54 years ago.

[Texas resident]

How about Charlie Rangel?

[SMGFan]

#BREAKING: #NY27: Scandal tarred Rep. Chris Collins (R) will not seek re-election and will attempt to remove his name from ballot.

https://twitter.com/RRHElections/status/1028304287200419840

[Impy]

Wonderful, so how do we get around NY’s ridiculous ballot laws.

Do we need Collins to expect a nomination to run for the Judge in the Bronx?

The wuss should stay and fight!

[AuH2ORepublican]

He can fight his indictment, while stepping aside and thus (i) let another Republican waltz to victory in his district (the most Republican in NY) instead of giving Democrats a straw to which to hold on and (ii) not make it easier for Democrats and the mainstream media (but I repeat myself) to establish the narrative that “Republicans running for reelection are all corrupt, why, Collins already was indicted and he’s still running.” Dropping out was the right thing for Collins to do.

[campaignPete R-CT]

Not sure he can fit his name off the ballot

I’ve been out at polls since 7 am ... Light turnout in CT
Interesting day

[AuH2ORepublican]

“Not sure he can fit his name off the ballot”
______________________

Of course he can. Collins merely has to accept the nomination to a judgeship somewhere in NY (the Conservative Party would be willing to nominate him in the Bronx or somewhere like that where the party doesn’t have a nominee and where the RATs are sure to win anyhow), or else he simply can declare primary residence (including registering to vote) in one of the two other states where he owns a house. Collins already said that he would do one or the other.

“I’ve been out at polls since 7 am ... Light turnout in CT
Interesting day”
______________________

I hope that, at the end of the day, the CT GOP nominates the rightmost electable candidate in each race. The GOP needs to win back the governorship and CT-05, plus a critical mass of state legislative seats, even if with sub-optimally conservative candidates.

[AuH2ORepublican]

BTW, Pete, I am assuming that you meant “get his name off the ballot” instead of “fit his name off the ballot.” If you meant “fit his name off the ballot,” then, you’re right, he may not be able to do that, whatever it means. : )

[campaignPete R-CT]

Yeah. Get. Spellchecker kills me. Santos a winner!