According to reports by NBC’s Tom Winter, GOP Rep. Chris Collins of New York has turned himself in to the FBI after being indicted by a grand jury for securities fraud.
The indictment also included Collins’ son, Cameron, as well as the father of his fiance, Stephen Zarsky.
The Hill reports that the indictment stems from securities of an Australian biotech company, Innate Immunotherapeautics. Collins allegedly gave private information to his son so that, according to prosecutors, the son could “make timely trades in Innate stock and tip others.”
According to The Hill, the company was expected to to receive positive results about a new multiple sclerosis drug.
However, the results proved less than successful and the company ended clinical trials in 2017.
The indictment alleges that while Collins knew about the failed results, he told stock holders he had “no bad news to report,” despite the company’s decision to halt trading on Australian markets.
However, Collins allegedly reported the poor test results to his son, who ended up selling over 1.3 million shares of the stock ahead of the company’s June 26 announcement that the drug test had failed.
Collins’ attorneys responded to the allegations on his website. “We will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name,” they said.
The statement concluded by saying that Collins, who was the first member of Congress to endorse then-candidate Donald Trump’s run for the Republican nomination in February 2016, will give an update later on Wednesday.
It was last year in a report by the Office of Congressional Ethics that the public was first informed of Collins’ dealings with Innate.
The report concluded that there was “substantial reason to believe that Representative Collins shared material nonpublic information in the purchase of Innate stock, in violation of House rules, standards of conduct, and federal law.”
Additionally, the report alleged that Collins used his position to urge other members of Congress to invest in the company, of which Collins is the largest stockholder.
Collins denied the allegations and maintained that he committed no crime.
His legal team released a statement at the time that said, “Rep. Collins has done nothing improper, and his cooperation and candor during the OCE review process confirm he has nothing to hide.”
However, he went after the OCE and, according to The Hill, told Capitol reporters, “They’re a waste of taxpayer money and they accomplish nothing.”
In 2012, Congress passed a law prohibiting members from trading stocks with insider information.
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