Serving as the U.S. Representative for New York’s 27th congressional district from 2013 until his resignation in 2019, former Rep. Chris Collins was sentenced Friday to 26 months in prison after pleading guilty to insider trading and lying to federal investigators. His son is scheduled to be sentenced later this week on similar charges.
While serving on Innate Immunotherapeutics’ board of directors on June 22, 2017, Rep. Collins received an email from Innate’s CEO explaining that a multiple sclerosis drug that the Australian biotech firm was developing had failed a critical drug trial. Due to the fact that Innate had no other significant products in development, its stock price was tied to the success of the multiple sclerosis drug.
Already under investigation by the Office of Congressional Ethics (OCE) in connection with his holdings in, and promotion of, Innate, Collins did not trade his own stock and instead immediately tipped off his son, Cameron Collins, to sell his Innate shares. Before the results of the drug trial were made public on June 26, 2017, Collins’ son sold approximately 1,391,500 shares of Innate stock which allowed him to avoid approximately $570,900 in losses.
According to the indictment, Cameron Collins and the father of Cameron’s fiancée, Stephen Zarsky, illegally tipped off their friends and family members to sell their Innate shares before the public announcement of the failed drug trial. As a result of the insider trading, Collins’ co-conspirators avoided a total of approximately $768,000 in losses.
Innate’s stock price subsequently crashed, dropping 92% on the first trading day following the public announcement on June 26, 2017.
“Former New York Congressman and Innate board member Christopher Collins received confidential, nonpublic information that one of Innate’s drugs in development had just failed a clinical trial,” stated U.S. Attorney Geoffrey Berman. “Moments later, from the White House lawn, Collins notified his son Cameron, so that he could trade the stock ahead of the public announcement and avoid taking a substantial loss on the stock. He then lied to the FBI when asked about his conduct. Collins’s greed and disregard for the law have now led to a criminal conviction for insider trading and lying to the FBI, his resignation from Congress, and over two years in federal prison. Lawmakers bear the profound privilege and responsibility of writing and passing laws, but equally as important, the absolute obligation of following them. Collins’s hubris is a stark reminder that the people of New York can and should demand more from their elected officials, and that no matter how powerful, no lawmaker is above the law.”
In August 2018, Rep. Collins, his son, and Zarsky were each charged with conspiracy, securities fraud, wire fraud, and making false statements to the FBI. On October 1, 2019, Collins pleaded guilty to participating in a scheme to commit insider trading and to making false statements to federal law enforcement agents when interviewed about his conduct.
On Friday, U.S. District Judge Vernon Broderick sentenced to the former congressman to 26 months in federal prison in addition to one year of supervised release and $200,000 fine.
Cameron Collins pled guilty to similar charges and is scheduled for sentencing this Thursday. Zarsky is scheduled to be sentenced on Friday.
If you liked this article, please donate $5 to keep NationofChange online through November.