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Insider Trading Scheme Unfolds: Congressman Collins and Two Others Charged
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrests of CHRISTOPHER COLLINS, a Congressman representing the 27th District of New York, CAMERON COLLINS, the son of CHRISTOPHER COLLINS, and STEPHEN ZARSKY, the father of CAMERON COLLINS’s fiancée, on charges of participating in a scheme to commit insider trading relating to securities of Innate Immunotherapeutics (“Innate”), an Australian biotechnology company on whose Board of Directors CHRISTOPHER COLLINS served.
As alleged in the Indictment, in June 2017, CHRISTOPHER COLLINS, who possessed material, nonpublic information through his service on Innate’s board of directors, betrayed his duties of trust and confidence to Innate by providing inside information to his son, CAMERON COLLINS, about confidential drug trial results so that his son and others, including ZARSKY, could trade before the drug trial results were publicly announced. As a result of CHRISTOPHER COLLINS’s illegal tips, CAMERON COLLINS, ZARSKY, and others who received the inside information avoided a total of approximately $768,000 in losses. When later interviewed by the FBI, CHRISTOPHER COLLINS, CAMERON COLLINS, and ZARSKY each made false statements to cover up their participation in the insider trading scheme.
CHRISTOPHER COLLINS, CAMERON COLLINS, and ZARSKY are each charged with conspiracy, securities fraud, wire fraud, and making false statements to the FBI. All three defendants surrendered this morning and will be presented and arraigned at 2:30 p.m. today before United States District Judge Vernon S. Broderick in federal court in the Southern District of New York.
In a separate action, the United States Securities and Exchange Commission (“SEC”) filed a civil action against CHRISTOPHER COLLINS, CAMERON COLLINS, and ZARSKY.
“Congressman Christopher Collins is charged with insider trading and lying to the FBI, as are his son, Cameron Collins, and Stephen Zarsky, the father of Cameron’s fiancée,” U.S. Attorney Geoffrey S. Berman said. “As alleged, Christopher Collins tipped confidential corporate information to his son, who traded on the inside information and passed it on to others, including Zarsky. Zarsky allegedly also traded on the information and tipped others. Representative Collins, who, by virtue of his office, helps write the laws of this country, acted as if the law did not apply to him. These charges are a reminder that this is a nation of laws, and everyone stands equal before the bar of justice. The charges demonstrate again that no matter what the alleged crime, or who allegedly committed it, we stand dedicated to the pursuit of justice, without fear or favor.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Congressman Christopher Collins sat on Innate Immunotherapeutics’ Board of Directors for a period of more than three years, spanning the run-up to the company’s clinical drug trial announcement in 2017. When he received confidential information that the drug had failed its trial, he tipped off investors with whom he shared a personal relationship, as we allege. Congressman Collins thought giving his family and friends a heads-up about material, nonpublic information would benefit them in the long run, but here’s a better inside tip for those who think they can play by different rules: Access to this kind of information carries with it a significant responsibility, especially for those who hold a position of trust in our society. Act honorably and in accordance with the law, and do not lie to a special agent of the FBI.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
The Insider Trading Scheme
The Scheme
In or about June 2017, CHRISTOPHER COLLINS, who, in addition to serving on Innate’s board of directors, possessed material, nonpublic information through his service on Innate’s board of directors, betrayed his duties of trust and confidence to Innate by providing inside information to his son, CAMERON COLLINS, about confidential drug trial results so that his son and others, including ZARSKY, could trade before the drug trial results were publicly announced.
Key Facts
- State: New York
- Category: White Collar Crime|Public Corruption
- Source: DOJ Press Release â†â€â€
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