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Chris Collins, a Republican congressman from upstate New York, surrendered to the FBI on Wednesday morning on securities fraud-related charges, federal prosecutors said.
Collins, 68, faces insider trading charges along with his son, Cameron Collins, and Stephen Zarsky, the father of Cameron Collins’ fiancée, according to the U.S. Attorney’s Office in the Southern District of New York.
The case is related to Innate Immunotherapeutics, an Australian biotech company, on which the elder Collins served on the board. He also is one of the firm’s biggest shareholders, owning nearly 17 percent of the stock, which is traded on the Australian Securities Exchange and in the United States on the over-the-counter market.
According to a grand jury’s indictment, Collins in June 2017 passed along material that was nonpublic to his son so that “could use that information to make timely trades in Innate stock and tip others” regarding the results of a drug trial that was supposed to treat a form of multiple sclerosis.
The drug trial had failed — and Innate’s stock would eventually tumble by 92 percent.
Cameron Collins, who owned more than 2 percent of Innate stock, the indictment said, allegedly passed the information from his father along to Zarsky and other unnamed co-conspirators, who then engaged in “timely trades” of Innate stock.
The defendants ultimately managed to avoid more than $768,000 in losses they would have otherwise incurred if they sold their stock in the company after the drug trial results became public.
The House Ethics Committee announced last fall that they were looking into Collins’ timely trades.
Collins, one of Donald Trump’s early supporters in his bid for president, is expected to appear in federal court later Wednesday in Manhattan.
Attorneys representing Collins said in a joint statement that they will “mount a vigorous defense to clear his good name.”
They added that prosecutors don’t allege in the indictment that Collins personally traded Innate stock: “We are confident he will be completely vindicated and exonerated.”
The three-term incumbent represents New York’s 27th Congressional District, which includes suburbs of Buffalo and Rochester, and is up for re-election in November. He has raised more than $1.34 million in his campaign war chest, according to the latest Federal Election Commission filing.
Political analysts have considered his Democratic opponent’s bid a long shot, the Niagara Gazette reported last month.
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