Charges Against New York Rep. Chris Collins Complicate Re-Election Bid

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Still on the South Lawn, Collins replied to company's top executive saying, "Wow".

The indictment charges Collins and two others, including the congressman's son, with conspiracy, wire fraud and other counts.

Around 6:55 p.m. that evening, while at the picnic, Collins received an email from the CEO of Innate informing the baord of directors that the drug had failed to pass its trials and could not be sold to the public. "Makes no sense. How are these results even possible???"

"There is a 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", according to the report by the non-partisan ethics office, released by the Ethics Committee last fall.

The defendants ultimately managed to avoid more than $768,000 in losses they would have otherwise incurred if they had sold their stock in the company after the drug trial results became public, prosecutors allege.

"This was the drop that was anticipated by the co-conspirators", Berman said.

As an Innate director, Collins was required to keep that information secret. Instead, as alleged, he chose to commit a crime.

PHOTO: President Donald Trump and Rep. Chris Collins participate in a congressional listening session with GOP members in the Roosevelt Room of the White House February 16, 2017 in Washington.

Collins did not trade his own stocks, which were held in Australia and subject to the trading halt.

Just 17 days before the phone calls and emails from the congressional picnic, Rep. Collins had spoken to the Office of Congressional Ethics regarding his holdings in and promotion of Innate Immunotherapeutics.

The SEC's complaint alleges that Cameron Collins told his girlfriend, who owned shares as well, and the two of them drove to the home of her parents, who were also shareholders. At 9.34pm, Zarsky's wife allegedly called their broker with instructions to sell their shares.

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Between June 23 and 26 Cameron also sold off his Shares.

On June 26 at the close of the market, Innate announced that the drug trial had failed.

At a brief arraignment in NY on Wednesday, Collins, his son and Zarsky entered not guilty pleas.

Lawyers for Collins said the congressman would be "completely vindicated".

All three defendants pleaded not guilty on Wednesday before U.S. District Judge Vernon Broderick in Manhattan, and were expected to be released on bail.

"We will answer the charges filed against Congressman Collins in court and will mount a vigorous defense to clear his good name", Collins' attorneys, Jonathan Barr and Jonathan New, said in a statement on Wednesday.

Collins, 68, has been one of the Trump's most ardent and outspoken supporters in the House.

Collins, who was first elected in 2012, is now running for a fourth term.

But in June 2017, the company got bad news: The drug had failed its trial.

The Daily Beast reported that nearly 30 per cent of Innate was owned by Collins or his associates including his two children, four campaign donors, and his chief of staff, and six Republican congressman.

Republican House Speaker Paul Ryan said Wednesday that "the allegations against Rep. Collins demand a prompt and thorough investigation by the House Ethics Committee" and dismissed the congressman from the House Energy and Commerce Committee "until this matter is settled".