GOP Rep. Chris Collins Hit With Insider Trading Charges
08 August, 2018, 21:26 | Author: Clarence Schmidt
The representative, who denies the charges, is not accused of selling stocks himself.
Insider trading occurs when an individual has access to information that isn't available to the public and trades stocks or securities based off the insider information.
Collins and top company executives expected the drug to pass clinical trials, which would significantly raise the value of the company's stock. The stock price rose as media reported on the men's holdings in the Australian company.
In addition, Mr Collins' shares were held in Australia, unlike his son's shares, which could be traded in the United States market.
The case is U.S. v Collins, 18-cr-567, U.S. District Court, Southern District of NY.
Attorneys for Cameron Collins said, "We intend to mount a vigorous defense on behalf of our client".
Collins' lawyers noted in a statement that the government has not said the congressman traded any shares of the stock. "We are confident he will be completely vindicated and exonerated".
Prosecutors said the charges relate to a scheme to gain insider information about Innate Immunotherapeutics Limited, a biotechnology company headquartered in Sydney, Australia, with offices in Auckland, New Zealand. By the time he sold the shares in February 2017, they were worth roughly 70 cents each, giving him a profit of more than $150,000, according to ProPublica.
A successful drug trial was needed before the drug could be sold commercially.
"Rep. Christopher Collins of NY has been arrested and indicted on charges tied to securities fraud. How are these results even possible?" But Collins advised Cameron to sell his stock, and Cameron later told Zarsky and six other family members to do the same, according to the indictment. One online trade was made while he was on the phone with his father.
Zarsky, too, allegedly traded on the inside knowledge and passed it along to yet more unnamed co-conspirators. He too then proceeded to tip others.
He faces charges from the FBI and Securities and Exchange Commission of securities and wire fraud and lying to federal officials.
The charging documents portray a scramble by the congressman and others in the wake of bad news about the drug trial. He serves on the Health subcommittee of House Energy and Commerce. When the House's ethics committee began investigating the stock trades a year ago, his spokesperson called it a "partisan witch hunt". "Insider trading is a clear violation of the public trust".
Collins, whose district covers parts of western NY between Buffalo and Rochester, has denied any wrongdoing.
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