Rep. Chris Collins (R-N.Y.) says that he'll continue to represent the state’s 27th Congressional District and will run for re-election, after being arrested on insider-trading charges on Aug. 8.
In a press conference the same day, Collins said he plans to clear his name for what he calls “meritless” accusations that involved his investment in an Australian biomedical company.
Collins was a board member and majority shareholder in Sydney-based Innate Therapeutics, which was developing a drug to treat multiple sclerosis.
Prosecutors allege that directly after he received the news, he made five phone calls to his son, who also had shares in the company, before finally reaching him on the sixth try.
The three men were charged with securities fraud, wire fraud, and making false statements to the FBI during interviews; all have pleaded not guilty. The Securities and Exchange Commission is also suing the three in Manhattan federal court.
Six others are mentioned in the indictment as co-conspirators, but none of them are named or face charges.
Collins and his lawyers have maintained that he is innocent, and point to the fact that he didn’t sell his shares after he learned of the news as evidence of his innocence.
His decision not to sell, however, could be due in part to logistics.
According to the indictment, Innate Therapeutics ordered a halt to trading on the Australian Securities Exchange (ASX) starting June 22, 2017, the same day Chris Collins allegedly received the news of the test results. Trading didn’t resume on ASX until June 27, 2017, but trading continued on the U.S. over-the-counter (OTC) market.
Cameron Collins was able to avoid $570,900 in losses by selling his stock before the news became public, and his fiancee’s father, Stephen Zarsky, avoided losses of about $143,900, according to the indictment.
“Without my investments in steadfast financial support, the company would have gone under, bringing with it a premature end to a drug I truly thought would revolutionize treatment options for secondary progressive MS.”
For that reason, he said, he decided not to sell his stock when he learned of the news.
Collins started his career in business before moving to politics. He bought a small industrial part manufacturer that made speed increasers and decreasers for things like bridges and train cars, and sold it in 1997. He first ran for Congress in 1998 and lost. He again entered the private sector, investing in bankrupt or failing companies. In 2007, he became county executive for Erie County, but lost to Democrat Mark Polonkarz in 2011, after which he said he would not run again.
However, he did run again in 2012 and won a seat in the House of Representatives, a post that he has held since then.
Before the indictment, he served on the House Committee on Energy and Commerce, but was taken off by Rep. Paul Ryan (R–Wisc.), pending the outcome of the case.
“Insider trading is a clear violation of the public trust. Until this matter is settled, Rep. Collins will no longer be serving on the House Energy and Commerce Committee.”
Collins, his son, and Stephen Zarsky have all been released on $500,000 bond.