Collins indicted on insider trading charges - Arcade Herald / Warsaw’s Country Courier: News

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Collins indicted on insider trading charges

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Posted: Wednesday, August 8, 2018 1:50 pm

NY-27 Representative Chris Collins has been arrested on insider trading charges, following his surrender to the FBI on Wednesday. The charges were brought by the United States District Court Southern District of New York.

Charges include securities fraud, wire fraud and false statements. Collins’ son, Cameron Collins, and Stephan Zarsky, father of Cameron Collins’ fiancée were also arrested.

Attorneys for Collins in a joint statement said they will “mount a vigorous defense to clear his good name”

The charges stem from dealings with Innate Immunotherapeutics Limited, a company in which the three defendants owned stock. Rep. Collins was also a member of the Board of Directors.

Innate Immunotherapeutics Limited is a publicly-traded Australian pharmaceutical company. The company was developing a drug intended to treat secondary progressive multiple sclerosis. In June 2017, the drug failed a drug trial; the public announcement caused the stock price of Innate to drop by 92 percent.

“This was the drop anticipated by the co-conspirators,” U.S. Attorney for the Southern District of New York Geoffrey Berman said in a press conference. “This was the drop the co-conspirators avoided … by tips from Congressman Collins.”

The indictments alleges Collins passed the results of the drug trial to his son, who passed the information to Zarsky, prior to the public announcement. In total, the trades allowed the three defendants and co-conspirator to avoid more than $768,000 in losses that would have occurred had they not sold their stock. The information was also allegedly passed to six co-conspirators who were not named in the indictment, but include family members of the Zarsky family.

In total, Cameron Collins sold approximately 1,391,500 shares of Innate stock in three days, and avoided potentially $570,900 in losses.

“Collins decided to commit a crime and placed his family and friends above [citizens],” Berman said.

The court does not allege Collins sold any of his stock, but points out he owned roughly 16.8 percent of the company’s total stock. Berman said Collins knew he could not sell his stock due to an ongoing investigation by the Ethics Committee.

“It is notable that even the government does not allege that Congressman Collins traded a single share of Innate Therapeutics stock,” the attorney statement reads. “We are confident he will be completely vindicated and exonerated.”

The grand jury also charges the three defendants devised a “scheme … to defraud, and for obtaining money and property by means of false and fraudulent pretenses.” In total there are 13 charges being brought against the three defendants.

“Congressman Collins … acted as if the law didn’t apply to him,” Berman said.

Congressman Brian Higgins, in a statement, said the indictments are backed by “comprehensive evidence.”

“I am confident that, in due course, justice will be served,” Higgins’ statement read.

Collins represents Genesee, Livingston, Orleans and Wyoming counties, as well as areas of Erie, Monroe, Niagara and Ontario counties. He was first elected in 2012 and is running for re-election this year. He faces Democratic challenger and Grand Island Supervisor Nate McMurray.

 

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