United States House of Representatives member Christopher Collins, a Republican from New York, was arrested and charged with illegally sharing inside tips with his son about an Australian biotechnology company Innate Immunotherapeutics, Ltd . Rep. Collins was a member of Innate’s board of directors and one of the company’s largest shareholders, holding approximately 16.8% of its stock, the indictment said. representative Collins has served in the House of Representatives since 2012. It is alleged that he conveyed material non-public information about the failed trial of a multiple sclerosis drug to his 25-year-old son, Cameron Collins, so that he could trade on the tip. Prosecutors assert that his son sold nearly 1.4 million Innate shares and passed the information onto other individuals, including his fiancí©e and her father, Stephen Zarsky. Mr. Zarsky then sold all of his Innate shares and shared the tip with others. Innate announced the failed drug trial after U.S. markets had closed on June 26, 2017. The next day, the company stock dropped 90%. The indictment says that the tip allowed the defendants to avoid $768,000 in losses.
Rep Collins, Cameron Collins and Mr. Zarsky were charged with 10 criminal counts, including securities fraud, wire fraud and making false statements during interviews with the Federal Bureau of Investigation. Before this indictment, Collins was already under investigation for his role in promoting Innate Immunotherapeutics. In October, the Office of Congressional Ethics found “substantial reason to believe” Collins violated federal law and House rules by meeting with federal officials in his congressional capacity to seemingly benefit the firm and also that he shared private information about the firm to solicit investors.