NY congressman arrested on insider trading charges

Rep. Chris Collins R-NY. speaks in Cleveland

US prosecutors on Wednesday said Chris Collins, a Republican congressman from Western New York, has been indicted for insider trading in connection with the securities of Australian biotechnology company Innate Immunotherapeutics Ltd.

According to the newly-unsealed indictment, timely sales based on inside information allowed Cameron Collins, Zarsky and others to avoid losses totaling more than $768,000 when the biotech company, Innate Immunotherapeutics Limited, failed a key clinical trial in June of a year ago. The fraud counts relate to securities of an Australian biotechnology company called Innate Immunotherapeutics, where the congressman served on the board.

Collins, a Republican who represents the 27th District of NY, covering the suburbs of Buffalo and Rochester, turned himself in to the FBI on Wednesday and is expected to appear in Manhattan federal court later in the day. Collins has also pushed several bills that would have benefitted Innate, which has gotten the attention of the the House Ethics Committee. "We are confident he will be completely vindicated and exonerated", Baker Hostetler attorneys Johnathan Barr and Jonathan New said in the statement. The stock price rose as media reported on the men's holdings in the Australian company.

In October, a congressional ethics investigation determined there was "a substantial reason to believe" Rep. Collins violated federal law when he promoted stock in Innate Immunotherapeutics using insider information. Prosecutors say Cameron Collins then passed the information along to Zarsky, who made a trade.

"Throughout my tenure in Congress I have followed all rules and ethical guidelines when it comes to my personal investments", Collins said in an statement when he resigned. He and the other defendants are charged with securities and wire fraud, conspiracy and lying to investigators.

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