Posted on

Ex-U.S. congressman, son and associate settle insider trading case with SEC

FILE PHOTO: Chris Collins, former U.S. Representative for New York’s 27th congressional district departs after pleading guilty at Federal Court in New York City, New York, U.S., October 1, 2019. REUTERS/Lucas Jackson

WASHINGTON (Reuters) – Former U.S. Representative Chris Collins of New York, his son and an associate settled insider trading charges with the Securities and Exchange Commission, the agency said in a statement on Monday.

The settlement bars Collins, an early backer of President Donald Trump, from serving as an officer or director of a public company. It requires his son, Cameron Collins, and associate Stephen Zarsky to repay the losses they avoided as a result of their insider trading, $634,299 and $159,880, respectively.

Chris Collins pleaded guilty in a New York City court to charges of conspiracy and making false statements to investigators in October, the day after he resigned his seat in the U.S. House of Representatives.

The case arose from Collins’ role as a board member and stakeholder of Australian biotechnology company Innate Immunotherapeutics Ltd. Collins tipped his son to non-public negative trial results for a multiple sclerosis drug developed by Innate Immunotherapeutics, the SEC said. His son then shared that information with others, according to the complaint.

The then-congressman did not himself trade his shares based on the information but Cameron Collins and Zarsky together sold nearly 1.7 million shares in advance of Innate Immunotherapeutics’ public announcement of the negative results, the SEC said.

Lawyers for the three men could not immediately be reached for comment.

The settlement included repayment of the avoided losses plus interest, but no additional penalties. It is subject to court approval, authorities said.

Reporting by Chris Prentice in Washington; Editing by Matthew Lewis