New York Rep. Chris Collins Arrested on Insider Trading Charges

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New York Congressman Chris Collins was arrested on Wednesday and charged with wire fraud, conspiracy to commit securities fraud, and seven counts of securities fraud. Also charged were Collins’ son Cameron Collins and the father of Cameron Collins’ girlfriend.

According to the U.S. Securities and Exchange Commission (SEC), Rep. Collins, who served as an independent director of an Australian biotech company, Innate Immunotherapeutics Ltd., learned of negative clinical trial results in June 2017 in an email from Innate’s CEO to the board of directors. The SEC alleges that Collins “replied to the CEO’s email within minutes, expressing his surprise at the results, and then called and spoke to his son minutes later.” Cameron Collins then allegedly tipped off his girlfriend’s father about the negative trial results.

In addition to the three defendants, the indictment and SEC complaint say the inside information was shared with six other people, all of them friends or relatives of Cameron Collins or Zarsky. Five of them sold Innate stock after receiving the tip and the sixth attempted to.

Cameron Collins’ fiancée, Lauren Zarsky, and her mother have reached a settlement with regard to the SEC’s civil charges, according to Stephanie Avakian, co-director of enforcement for the SEC. The two women have agreed to surrender the proceeds of their stock sales, subject to court approval. Lauren Zarsky also agreed to suspend her practice as a certified public accountant for at least five years.

Additionally, the SEC is seeking a court order barring Chris Collins from ever serving as an officer of any public company.

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