A member of Congress involved in alleged insider trading in an Australian biotechnology company resigned Monday in advance of an anticipated guilty plea.
Rep. Chris Collins, R-New York, sent a letter to New York Gov. Andrew Cuomo Monday, stating he would resign effective immediately. Citing an unnamed Republican source, Politico had reported earlier in the day that Collins would appear in federal court Tuesday in Manhattan to plead guilty to insider trading charges related to his investment in the company. His son, Cameron Collins, was also expected to plead guilty, along with Stephen Zarsky, the father of Cameron’s fiancee.
The congressman, who since 2013 had represented New York’s 27th district, in the western part of the state, was arrested last August in connection with his investment in Sydney-based Innate Immunotherapeutics, of which he was a director. However, he declined to resign at the time.
He had already been under investigation by the Office of Congressional Ethics in relationship to his holding a 16.8 percent stake in Innate, as well as his promotion of the company. Cameron Collins had held a 2.3 percent stake.
According to the indictment last year, Collins passed what had been confidential negative results from a Phase IIb clinical trial of Innate’s drug, MIS416, in secondary progressive multiple sclerosis, to his son, who then sold nearly 1.4 million shares of the company over several days before the results were made public. Innate CEO Simon Wilkinson had obtained the results on June 22, 2017, ahead of the company’s June 27, 2017 announcement, and forwarded them to board members, including Collins.
Despite initial optimism about the trial, Innate announced on June 27 that the drug had failed to provide any significant benefit to patients, and Innate’s stock fell 90 percent on the Australian Stock Exchange. Although trading was suspended on the ASX ahead of the announcement, the company’s shares continued trading on the over-the-counter market in the U.S., where Cameron Collins’ shares were held. The elder Collins allegedly called his son, who then had his brokerage firm sell the shares, enabling the Collinses and other conspirators to avoid $768,000 in losses that they would have incurred had they waited for the results to become public.
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