Home Trendy News New York GOP Rep. Chris Collins arrested on insider trading charges

New York GOP Rep. Chris Collins arrested on insider trading charges

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From 2017: Rep. Chris Collins has proposed federal legislation that would make illegal key parts of New York’s SAFE Act. Collins’ bill is called SAGA — the Second Amendment Guarantee Act.
Jeff DiVeronica

Rep. Chris Collins was arrested Wednesday morning on federal charges relating to securities fraud.  According to WGRZ news, the Buffalo area congressman surrendered to the FBI in Manhattan this morning.

The U.S. Attorney’s office for the Southern District has scheduled a press conference for noon to discuss the charges.

A federal indictment charges Collins his son Cameron, and Stephen Zarsky, the father of Cameron’s fiancee, with wire fraud, conspiracy to commit securities fraud and seven counts of securities fraud.

Collins is also charged with making false statements to the FBI.

► READ: Federal indictment against Collins, et al

► READ: SEC complaint against Collins, et al

Specifically, Collins is accused of receiving inside information about negative clinical trial tests conducted by Innate Immunotheraputics, an Australian biotech company with which he has long been associated. 

The inside tip prompted Collins’ son, and others to sell $1.78 million Innate shares shortly before the bad news was made public in June 2017 and the share price plummeted.

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They avoided losses of $768,600, according to the complaint filed by the Securities and Exchange Commission.

Last year, the House ethics committee began investigating Collins for potential violations of federal law and House rules regarding insider trading.

In March, the non-partisan Office of Congressional Ethics began reviewing Collins’ activity and voted to send its findings to the House ethics panel in July.

The committee was looking into whether Collins shared material nonpublic information in the purchase of Innate stock. Additionally, the Office of Congressional Ethics said it its report that Collins may have also purchased discounted Innate stock that was not available to the public and that was offered to him based on his status as a member of the House of Representatives.

In a statement in October, the Committee on Ethics said it would not make additional public statements on the matter pending completion of its initial review. No additional statements have been released.

According to the report, Collins attended a meeting of the National Institutes of Health in November 2013 and during the meeting, discussed Innate and asked that NIH employees meet with company employees to discuss clinical trial designs. The report says if Collins took official actions or requested official actions that would “assist a single entity in which he had significant financial interest” he may have violated House rules and standards of conduct.

Collins’ attorneys issued a statement shortly after his arrest.

“We will answer the charges filed against Congressman Collins in Court and will 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. Congressman Collins will have more to say on this issue later today.”

Collin’s congressional district, the 27th, includes all of Genesee, Orleans, Livingston and Wyoming counties; western Ontario County; Hamlin and a small part of the town of Clarkson in Monroe County, and most of Erie and Niagara counties.

This is a developing story.  Check back for more details.

SLAHMAN@Gannett.com

Includes reporting by staff writers Gary Craig, Steve Orr, Jon Campbell and Meaghan McDermott.

 

 

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