Rep. Chris Collins Indicted on Insider Trading: First Unsealed Indictment?
August 8, 2018
Some are describing this as the first unsealed indictment. Time will tell. Thanks to John.
New York Rep. Christopher Collins indicted on insider trading charges
Andrew O’Reilly, Fox News, Aug. 8, 2018
New York Republican Rep. Christopher Collins has been indicted on insider trading charges, federal prosecutors announced Wednesday.
“These charges are a reminder that this is a land of laws and that everyone stands [equal] before the bar of justice,” Geoffrey Berman, an attorney for the U.S. Southern District of New York, said during a press conference on Wednesday.
The indictment also names the congressman’s son, Cameron Collins, and Stephen Zarsky, the father of his son’s fiancée. The fraud counts relate to securities of an Australian biotechnology company called Innate Immunotherapeutics, where the 68-year-old congressman served on the board.
“Christopher Collins, the defendent, violated the duties he owed to Innate by passing material; nonpublic information regarding the Drug Trial results to his son, Cameron Collins, the defendent, so that [his son] could use that information to make timely trades in Innate stock and tip others,” the indictment states. “Cameron Collins traded on the inside information and passed it to Stephen Zarsky.”
Among the charges, the defendants are accused of multiple counts of securities fraud, along with one count of wire fraud, one count of conspiracy to commit wire fraud and one count each of making false statements.
All three pleaded not guilty in court Wednesday afternoon.
Prosecutors allege that Collins passed along secrets to his son, Cameron, in June 2017. They say the son traded on the inside information and passed it to Zarsky. They added that Zarsky traded on it and tipped off at least three others.
According to the indictment, Collins specifically got early word that a drug the company developed to treat multiple sclerosis wasn’t performing well in a medical trial and passed on the tip to his son.
Prosecutors said the three avoided over $768,000 in losses by trading ahead of the public announcement of the failed drug trials.
The advocacy group Public Citizen filed a request for an investigation of Collins’ stock dealings with the Office of Congressional Ethics and the Securities and Exchange Commission in January of 2017.
The Republican congressman, who has served New York’s 27th District since 2013, surrendered to federal agents in Manhattan on Wednesday morning and is expected to appear in federal court in lower Manhattan later in the day.
Attorneys representing Collins released the following statement on Wednesday: “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.”
In 2017, the House Ethics Committee probed the congressman at the behest of the late Rep. Louise Slaughter. She authored the STOCK Act, which barred lawmakers and aides from using propietary information to trade securities.
The Ethics Committee report on Collins was muddled. It did not punish Collins. But it did not exonerate him either.
When asked about the report by Fox News, Collins at the time called Slaughter “a despicable human being,” a rare moment of course language used by a U.S. congressman to describe a colleague. Collins disputed the findings and said he has “always followed ethics.”
House Speaker Paul Ryan, R-Wis., said on Wednesday that he was removing Collins from the House Energy and Commerce Committee.
Ryan called insider trading “a clear violation of the public trust.” He said he’s moving against Collins even though a court will decide whether the lawmaker is guilty of the allegations.
House Minority Leader Nancy Pelosi, D-Calif., said in a statement that “the charges against Congressman Collins show the rampant culture of corruption and self-enrichment among Republicans in Washington.”
“The American people deserve better than the GOP’s corruption, cronyism, and incompetence,” she added.
Collins has a track record of publicly backing Trump, including being one of the first sitting members of Congress to endorse his candidacy. Most recently, Collins called for an end to Special Counsel Robert Mueller’s probe into campaign collusion and blamed the Obama administration for failing to push back on Russia.
“I share President Trump’s continued frustration as the left continues to try to nullify the 2016 Presidential election with claims of Russian interference,” he said.
Collins ran unopposed in the Republican primary and holds what’s largely considered a safe Republican seat in a state that went to Democratic nominee Hillary Clinton in 2016. He’s being challenged by Democrat Nate McMurray, a Grand Island, New York, town supervisor.
Fox News’ Chad Pergram and Tamara Gitt and The Associated Press contributed to this report.
“GOP Congressman Chris Collins charged with insider trading,” USA Today, Aug. 8, 2018, athttps://www.usatoday.com/story/news/politics/2018/08/08/chris-collins-arrested-insider-trading-new-ork-congressman/933477002/
“Rep. Chris Collins indicted on insider trading charges,” WGRZ Staff, August 8, 201, at https://www.wgrz.com/article/news/crime/rep-chris-collins-indicted-on-insider-trading-charges/71-581613154
“Rep. Chris Collins arrested in insider trading case: What we know now,” Democrat & Chronicle, Aug. 8, 2018, athttps://tinyurl.com/ybj7jkvw
“Rep. Chris Collins says he’s innocent on insider trading charges and will run in November,” Sean Lahman,Meaghan M. McDermott and Will Cleveland, Rochester Democrat and Chronicle, Aug. 8, 2018, athttps://tinyurl.com/y998yb4y