Former Rep. Chris Collins (R-N.Y.) has pleaded guilty in an insider trading case a day after resigning from his congressional seat.
Collins pleaded guilty to conspiracy to commit securities fraud and making false statements in a federal court in Manhattan on Tuesday, Oct. 1, according to the New York Post. Each count carries a penalty of five years in prison and a $250,000 fine.
The 69-year-old former congressman, who represented New York’s 27th Congressional District since 2013, was initially indicted on a slew of charges including multiple counts of securities fraud, wire fraud, and other crimes in a case that stems from an Australian biotechnology company for which Collins serves as a board member and was the largest shareholder.
Prosecutors accused Collins of passing sensitive drug-test results from the company, Innate Immunotherapeutics, to his son back in June 2017 after learning that the drug was proven a clinical failure, according to a 2018 indictment.
The next day Collin’s son began trading enough over a two-day period to avoid losses before a public announcement of the drug trial results. After the announcement, the company’s stock price plunged 92 percent.
Along with Collins, his son Cameron Collins and Cameron’s fiancée’s father, Stephen Zarsky, were also indicted. Cameron has been accused of sharing the inside information with Zarsky, who then traded on it and tipped off others. The insider trading allowed the defendants “to avoid over $768,000 in losses that they would have otherwise incurred if they had sold their stock in Innate after the Drug Trial results became public,” prosecutors said.
Cameron and Zarsky are expected to plead guilty on Thursday.
“I understood I had a duty not to disclose confidential information,” Collins told District Judge Vernon Broderick on Tuesday, according to the Post. “This is something I will live with for the rest of my life.”
After Collins was indicted, then-House Speaker Paul Ryan removed Collins from the House Energy and Commerce Committee until the allegations were settled.
Collins’s departure is expected to initiate a battle on who would replace him on the ballot.
It will be up to Democratic Gov. Andrew Cuomo to set a special election to replace him. The governor said in radio interview on Tuesday that the timing remains uncertain for an election that’s expected to now draw even more candidates to an already crowded field.
“The question is, when can I do it?” Cuomo said. “But sooner rather than later is my inclination.”
According to the Post, Collins signed a plea deal on Sept. 24 where prosecutors recommend a jail term of 46 to 57 months. His sentencing is scheduled for Jan. 17.
Epoch Times reporter Bowen Xiao and The Associated Press contributed to this report.