The dapper and dashing Representative Chris Collins (R-NY) felt the sting of scandal as he was arrested for insider trading Wednesday, August 8. The Buffalo area Congressman was indicted by a federal grand jury for passing along non-public information to his son, who in turn traded on the information and told others.Representative Chris Collins (R-NY)
Joining Collins in the indictment are his son, Cameron Collins, and Stephen Zarsky, Cameron’s future father-in-law.
Adding insult to injury, The Securities Exchange Commission (SEC) filed an equivalent civil suit that “seeks disgorgement of ill-gotten gains plus interest, penalties, and permanent injunctions. It also seeks an officer and director bar against Christopher Collins.” Which is SEC speak for good luck in finding a cushy seat on a corporate board.
The Back Story
Innate Immunotherapeutics Limited (Innate), a biotech company with headquarters in Australia and offices in New Zealand, is ground zero for the latest Swamp scandal. Representative Collins was a board member in June 2017 during a time of research and development of a drug intending to treat Secondary Progressive Multiple Sclerosis.
If the trial were a success, profits would be enormous for stockholders. But on June 22, 2017, according to the indictment, Collins, who was in attendance of a Congressional picnic at the White House, opened an email from Innate’s CEO, spreading the disappointing news that the drug had failed the trial.
Collins phoned his son and informed a small group of investors who sold their shares prior to the news going public, causing stock prices to plummet more than 92% in the aftermath:
“In the hours and days after learning of the drug trial results, Christopher Collins, his son, and their associates exchanged a flurry of calls,” said Steven Peikin, Co-Director of the Enforcement Division. “The investigation yielded a detailed footprint left by the defendants, revealing their frantic efforts to sell shares and warn others before Innate announced bad news.”
Collins was unable to dump his Innate shares as they were held in Australia and trading had been suspended due to the pending announcement on the drug trial.
Lauren Zarsky, Cameron Collins’ fiancé, and her mother, Dorothy Zarsky, were also involved in insider trading. But without admitting guilt, they copped to punishment according to an SEC statement:
“Dorothy Zarsky consented to the entry of final judgments without admitting or denying the charges that they sold their shares of Innate based on tips they received from Cameron Collins. Lauren Zarsky agreed to disgorge her ill-gotten gains of $19,440, plus prejudgment interest of $839, and pay a civil penalty of $19,440. Dorothy Zarsky agreed to disgorge her ill-gotten gains of $22,600, plus prejudgment interest of $975, and pay a civil penalty of $22,600.”
Yes, their Thanksgiving table may be rife with tension this coming November.
Speaker of the House Paul Ryan (R-WI) will not have his smooth exit from the Swamp as originally planned. Ryan has called on the House Ethics Committee to conduct its own review of the allegations against Collins and has removed him from the House Energy and Commerce Committee until the investigation is final.
Collins’ fate will be decided by the courts, whether guilty or innocent, but the allegations have inflicted a black eye on the GOP heading into midterms. Collins knows the ropes in the Swamp and should’ve stepped down months ago, for the good of the Republican Party and this administration. Heading into midterms, this is yet another arrow the left will sling to sway the electorate.