- Rep. Chris Collins, R-N.Y., was arrested Wednesday morning by the FBI on insider trading charges related to his investment in the Australian biotech company Innate Immunotherapeutics.
- Innate is a penny stock trading on the Australian Securities Exchange that has a long history with Collins. The U.S. Attorney's Office in the Southern District of New York alleges that Collins shared the news of the failure of a pivotal clinical trial before it was public to recommend "timely trades in Innate stock."
- The New York Republican faces counts of securities fraud, wire fraud and making false statements to an FBI special agent, according to the 30-page indictment. His son, Cameron Collins, and Stephen Zarsky, the father of his son's fiancee, were also indicted and charged.
Innate is about as small of a player in the biotech business as it gets, closing on the Australian market yesterday with a $12 million market cap. But the case highlights the ongoing issue of investors and others getting access to market-moving clinical data before it becomes public.
Collins was one of Innate's largest shareholders and sat on its board. In the indictment, prosecutors said he "regularly had access to material, nonpublic information" on the company in this role.
Innate's CEO first shared the trial failure news with Collins in a June 22, 2017 email, the indictment said. Collins then called his son within minutes, passing along insider info that his son used to trade and share with others.
His son then gave that info to Zarsky, as well as three other unnamed people, according to the indictment. And Zarsky handed it on to three additional unnamed people, all before the trial failure was made public.
The representative also falsely told the FBI in an April 2018 interview that he did not tell his son about the trial results before the public announcement, prosecutors said.
An unanswered question going forward: To what extent were other politicians entangled with Collins and Innate?
Previous news reports suggested Collins brought in several of his fellow Republican colleagues in the House.
In 2016, then-Rep. Tom Price, R-Georgia, purchased between $50,001 and $100,000 in Innate stock. Four additional representatives bought in January 2017 as well, according to a watchdog group. None of them were named in the indictment.
The congressman's attorneys vowed 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," his lawyers said in a brief statement following the news. "We are confident he will be completely vindicated and exonerated."