BUFFALO, N.Y. -- Rep. Chris Collins pleaded not guilty in a federal court in Manhattan to charges of insider trading; specifically, conspiracy to commit securities fraud.
The Republican Collins represents the 27th District, which encompasses eight Western New York and Finger Lakes counties outside of the cities of Buffalo and Rochester, and has since 2013.
According to the U.S. Attorney in New York's Southern District, the indictment relates to Innate Immunotherapeutics, on whose board of directors Rep. Collins had served.
Specifically, Collins is accused of giving inside information to his son Cameron, who the indictment alleges upon learning of that non-public information, sold roughly 1.4 million shares of his company and then notified four other co-defendants: his fiancée, his soon to be in-laws of which Stephen Zarsky is named, and a friend who subsequently sold shares as well.
Cameron himself allegedly avoided approximately $570,000 in losses. In total, the defendants and six others not named as defendants were able to, allegedly, save themselves more than $768,000 in losses they would have otherwise incurred if they had waited for the information to go public.
The Australian biotechnology company was working on a multiple sclerosis drug. According to paperwork, on June 22, 2017, Collins received an email from the CEO that the drug had likely failed its clinical trial.
Roughly 15 minutes later, Collins, who was attending the Congressional Picnic at the White House, began making calls to his son. The first six calls were missed but Chris Collins was apparently able to reach Cameron on the seventh try.
The results of the drug trial went public on June 26 and the following day, Innate’s stock plummeted by more than 92 percent.
A congressional investigation surrounded whether Collins had inappropriately promoted the company to a number of friends, including fellow members of Congress, who bought stock in it. That complaint had been referred to the House Committee on Ethics.
Innate Immunotherapies is aware of the indictment and "wishes to advice that it has cooperated fully with requests for information made to it by the U.S. Securities and Exchange Commission. The Company and its directors/officers (excepting Mr. Collins) are not under investigation. The Company considers the ongoing investigation to be a private matter to Mr. Collins."
The company adds that Collins retired from Innate in early May and "is no longer involved with the governance of the Company."
Collins has maintained throughout the congressional investigation that he did nothing wrong. No other members of Congress appear to be named in the indictment.
Collins faces Democrat and Grand Island Town Supervisor Nate McMurray, who has consistently pointed out Collins' ties to President Donald Trump, in the upcoming fall election.