BUFFALO, N.Y. -- Rep. Chris Collins was incited, and pleaded not guilty to, 11 charges of insider trading Wednesday, specifically that he conspired to commit securities fraud.

The information Collins’ received was related to his role as director and 16 percent investor in Innate Immunotherapeutics, an Australian biotechnology company, according to federal authorities. Collins is alleged to have notified his son, Cameron, that the company’s product had failed an important test and that Inate’s CEO told Collins the news would cripple the company. Collins' son subsequently sold off nearly 1.4 million shares of Innate, according to the U.S. Attorney's Office for the Southern District of New York.

But what does insider trading really mean? We sat down with some experts to get to the bottom of the charges and the possible implications.

What is insider trading?

“Insider trading is using material information to your own benefit that's non-public. So if you have information on a company, whether it's going to be in this case it was that they were going to fail a particular drug trial, or they failed the trial already, and you trade based on that non-public information whether it be for your own personal gain or to avoid a loss, that's a big part of it too, is avoiding a loss, then you're not allowed to trade using that information," said Glenn Wiggle, a partner with The Financial Guys.

What if the information had come from a different source?

"If an analyst from the outside had predicted that this drug wasn't going to work, then that's information considered available to a wide range of people and that would not be considered information, then that would not be insider trading. But it's a question of how he did he get the news," explained Ron Hansen, retired Dean of the University of Rochester's Simon School of Business.

Prosecutors allege Collins received the information in an email from Innate's CEO days before the news of a failed drug trial was made public.

Do authorities believe Collins himself benefited from the information?

Based on information provided in an unsealed indictment, no, because he didn’t sell his company stock based on the information, Wiggle said. Then again, that might raise more legal questions.

“Is it illegal to share insider information with somebody else if you don’t act on it? I’m not quite sure about that, actually. That’s probably a stretch, to be honest with you,” he said.

On the other hand, Collins’ son, Cameron, and Cameron’s future father-in-law did benefit to the tune of avoiding a loss of $750,000, according to the U.S. Attorney.

Who else has faced charges like this?

In high-profile cases, lifestyle guru Martha Stewart and Dallas Mavericks’ owner Mark Cuban have both been charged with insider trading. “Martha Stewart, in her case, she sold the stock the day before the results became public and, as a result, she lost her trial and was convicted [of lying to federal investigators],” Wiggle said.

Cuban won his case claiming he didn't know the information he received was non-public. Collins' lawyers maintain he did nothing wrong — and he will likely have his day in court. 

What will this mean for Collins’ chances to retain his seat in the November election?

"To the extent that it shakes up the party, it makes a district that had been a locked now in play," said Kathleen Donovan, a political science professor at St. John Fisher College. "They're sort of facing an uphill battle. This doesn't help."

In all likelihood, Collins’ name will remain on the ballot in the 27th District, where he’s up against Democrat Nate McMurray from Grand Island. A political party cannot remove a candidate’s name from the ballot unless he runs for another office, leaves the state or dies.

If he wins, there could be two outcomes.

“[Congress] could censure him,” said Jacob Neiheisel, an assistant professor of political science at University at Buffalo. Or, “they could actually vote to remove him from the House.”

A censure is “a slap on the wrist, ‘you shouldn’t have done that,’ and that’s about it,” he said.