Rep. Chris Collins (R-NY) was arrested and indicted on federal insider trading charges Wednesday.
The charges, brought by the Manhattan U.S. Attorney’s office, relate to securities of Innate Immunotherapeutics, an Australian biotechnology company on whose board Collins served.
Collins’ son Cameron and Stephen Zarsky, the father of Cameron Collins’ fiancée, were also listed as defendants.
Collins was the first congressman to endorse Donald Trump’s 2016 presidential campaign, and has been a loyal defender of Trump’s agenda on Capitol Hill.
“Congressman Collins, who by virtue of his office, helps to write the laws of our nation, acted as if the law didn’t apply to him,” Geoffrey Berman, the U.S. Attorney for the Southern District of New York, said at a press conference Wednesday.
In a statement shared by the congressman’s office, Collins’ lawyers pledged to “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,” Baker Hostetler attorneys Johnathan Barr and Jonathan New said in the statement.
“Congressman Collins will have more to say on this issue later today,” they added.
According to the complaint, Collins learned on June 22, 2017 that a drug Innate was developing to treat multiple sclerosis had failed clinical trials. He allegedly then promptly notified his son of the nonpublic information, who spread the news to other family members and friends who had bought shares in the company.
Associates of Collins “collectively sold over 1.78 million Innate shares” before the poor trial results were announced on June 26, “Cameron Collins, Stephen Zarsky, and their tippees avoided total losses of approximately $768,600,” the complaint alleges.
Collins’ involvement with Innate was the subject of a congressional ethics watchdog report released last October. The independent Office for Congressional Ethics (OCE) concluded that there is “substantial reason to believe” that he broke ethics rules and federal law by sharing nonpublic information about the purchase of Innate stock with investors.
The report also cited interviews with two National Institute of Health employees who said that Collins asked an NIH employee to help Innate with a clinical trial.
Collins also reportedly talked up the investment opportunities with Innate to other Republican officials, including ousted Health and Human Services Secretary Tom Price. Innate Immuno CEO Simon Wilkinson told the Wall Street Journal last January that Price was among a small group of investors offered an exclusive deal to purchase discounted shares. Wilksinson subsequently walked back those claims, saying they were available to “every US shareholder who had ever participated in any share offering in the US.”
Collins has represented his western New York congressional district since 2013. He is a member of the House Energy and Commerce Committee.