New York Rep. Chris Collins Resigns and Pleads Guilty to Insider Trading
Rep. Chris Collins, R-N.Y., resigned from Congress last week before pleading guilty to insider trading charges in Manhattan court.
The guilty plea comes after Collins denied for more than a year charges that he shared inside information with his son Cameron Collins and his son’s fiancée’s father, Stephen Zarsky about the Australian biotech company Innate Immunotherapeutics.
“By virtue of his position, Collins helped write the laws of this country, yet acted as if the law didn’t apply to him,” said Geoff Berman, the U.S. Attorney for the Southern District of New York, in a news conference. “No one is above the law. And it is because of our office’s commitment to and pursuit of that ideal that Collins is now a convicted felon and no longer a member of Congress.”
Collins served on the board of and was a major shareholder in Innate, and in June 2017 was made aware that the company’s sole product, a drug designed to treat multiple sclerosis, had failed a drug trial. Prosecutors say that before this information was made public, Collins called his son to tell him the news. Cameron Collins then sold most of his shares in the company, and informed Zarsky, who told others and traded his own shares.
“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 SEC Enforcement Division, in a statement. “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.”
The SEC filed insider trading charges against Chris Collins, Cameron Collins, and Stephen Zarsky in Aug. 2018. The government filed a superseding indictment in Aug. 2019, charging the three defendants with securities and wire fraud, conspiracy and lying to the FBI.
Cameron Collins and Zarsky were able to avoid over $700,000 in losses through their trading after Innate’s stock price plummeted more than 92% following the public release of the failed drug trial results, according to the SEC.
On Tuesday, Collins pleaded guilty to conspiracy to commit securities fraud and lying to investigators. He faces up to ten years of prison, and his sentencing will take place Jan. 17.
Collins’ resignation leaves his seat in Congress open with 13 months until the next congressional election. Governor Andrew Cuomo is expected to call a special election to fill Collins’ seat in the 27th district, a heavily Republican-leaning district, to coincide with the April 2020 presidential primary.
“The next scheduled election is at the end of April, and there’s a benefit to doing it on a scheduled election date because then you don’t have to hold a special election just for one office,” Cuomo told WBFO.
Hearings for Cameron Collins and Zarsky to register guilty pleas are scheduled for Thursday.
WHAT THE LEFT IS SAYING: New York 27th District Congressional Candidate Nate McMurray: “Collins looked so defeated today. He was so mean, so awful to me and my family, so dismissive of the people of Western New York. I don’t want hate in my heart. I still can’t revel in his downfall. It’s sad…for all of us. BUT HE SHOULD NOT GET A CONGRESSIONAL PENSION.”
Collins looked so defeated today. He was so mean, so awful to me and my family, so dismissive of the people of Western New York. I don’t want hate in my heart. I still can’t revel in his downfall. It’s sad…for all of us.
BUT HE SHOULD NOT GET A CONGRESSIONAL PENSION
— Nate McMurray (@Nate_McMurray) October 1, 2019
WHAT THE RIGHT IS SAYING: New York 27th District Congressional Candidate and Sen. Rob Ortt: “Our district has the opportunity for a new generation of leadership. I’m a battle-tested patriot, I’ve worked to secure our border, and I’ve fought the radical liberals in Albany. My campaign is not just about having a seat at the table, it’s about flipping the table over.”
Our district has the opportunity for a new generation of leadership. I’m a battle-tested patriot, I’ve worked to secure our border, and I've fought the radical liberals in Albany. My campaign is not just about having a seat at the table, it’s about flipping the table over. #NY27 pic.twitter.com/a7kauTEvgG
— Rob Ortt for Congress (@OrttforCongress) September 30, 2019