Democratic Congresswoman Louise Slaughter is renewing calls for an investigation into stock trades surrounding Australian biotech company Innate Immunotherapeutics.
Shares plummeted Tuesday by more than 90 percent on a failed clinical trial for its multiple sclerosis treatment.
The company's largest shareholder is Western New York Congressman Chris Collins.
The Republican has strongly denied accusations he did anything illegal or unethical by talking up the stock to other members of Congress and friends in Western New York, some of whom purchased shares.
In an emailed statement, Slaughter says:
“This follows the company previously suggesting a great response to its drug and touting that it stood to generate as much as $3 billion in profits in this country alone. This raises very serious questions as to when Congressman Collins knew about the drug’s performance and who is responsible for the suspicious trading before the drug’s failure was publicly known."
According to the NASDAQ website, Innate Immunotherapeutics hit a 52-week high of about $1.58 in January.
It closed at $0.55 on Monday, and fell to three-and-a-half cents on Tuesday.