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US congressman, Trump loyalist, indicted for insider trading
NEW YORK, Aug 9, 2018 (BSS/AFP) – US House Republican and Trump loyalist
Chris Collins, who has been indicted by federal prosecutors for securities
fraud, remained defiant Wednesday as he vowed to clear his name and secure
re-election.
Collins was arrested and charged along with his son Cameron Collins and
another defendant for their role in illegal trading of stock in Australian
biotech firm Innate Immunotherapeutics, where the elder Collins was a board
member, according to the indictment, which was just unsealed.
“As I fight to clear my name, rest assured I will continue to work hard for
the people and constituents of the 27th Congressional District of New York,
and I will remain on the ballot running for re-election this November,” he
told a press conference late Wednesday.
Collins, 68, “tipped his son to confidential corporate information at the
expense of regular investors. And then he lied about it to law enforcement to
cover it up,” according to Geoffrey Berman, the US Attorney for the Southern
District of New York.
Cameron Collins then used the insider information “to make timely trades in
Innate stock and tip others,” the indictment alleges.
Among the charged co-conspirators was Cameron’s fiancee’s father, Stephen
Zarsky.
Innate had been developing a drug to treat multiple sclerosis, but in June
2017 the drug’s clinical trial was declared a failure.
As a board member, Collins was informed of the “extremely bad news” by the
company’s chief executive before the findings were publicized.
Collins was a major investor in the company, owning millions of dollars’
worth of its stock.
He himself did not trade any of his holdings ahead of the negative report’s
publication, in part because he was already under investigation by the Office
of Congressional Ethics regarding his holdings.
His stock ultimately declined by millions of dollars in value when the
share price plummeted by 92 percent one day after the trial results were
released, federal prosecutors said.
But he knowingly broke the law by alerting his son to the privileged data
before its publication, it added.
– ‘Meritless’ charges –
The trades allowed Cameron Collins, Zarsky and others “to avoid over
$768,000 in losses that they would have otherwise incurred” if they sold the
stock after the announcement, according to the indictment.
Lawyers for the congressman insisted he had done nothing wrong and would be
“completely vindicated.”
Collins told reporters he was “proud” of his affiliation with Innate.
“I may have lost most of the money that I invested in the company, but I
took the chance to bring relief to those who deal with the dreadful disease
of secondary progressive MS every day,” he said.
“The charges that have been levied against me are meritless, and I will
mount a vigorous defense in court to clear my name.”
Collins, who represents Buffalo’s suburbs and other counties in western New
York, was the first House Republican to openly support Trump’s bid for the
party’s nomination in the 2016 race, and he has remained loyal to the
president.
House Speaker Paul Ryan said the allegations demand a “thorough
investigation.”
But he stopped short of a harsh reprimand, stating only that Collins will
be removed from the House Energy and Commerce Committee.
Democrats have long sought to portray the Trump-era Republican Party as
corrupt, and the opposition leadership pounced on Wednesday’s news.
“The American people deserve better than the GOP’s corruption, cronyism,
and incompetence,” House Minority Leader Nancy Pelosi said, as she called for
new laws that would “crack down on the self-dealing that has metastasized
under the GOP Congress and the Trump Administration.”
BSS/AFP/FI/ 0842 hrs