Former New York congressman Chris Collins has resigned after a long fight with the Securities Exchange Commission over insider trading charges.
Mr. Collins was expected to be tried in February, along with his son, Cameron Collins, and another man named Stephen Zarsky. All of them plead not guilty at the time. However, circumstances changed on Oct. 1 when Collins plead guilty for conspiracy to commit securities fraud and lying to federal investigators.
Collins now faces a prison sentence of up to 10 years. His son and Mr. Zarsky also plead guilty to insider trading charges on Oct. 3(Source: Trading Scheme Involving Former Congressman Christopher Collins, U.S. Department of Justice).
Former Rep. had close ties to Australian drug company
Prosecutors say Collins was contacted by the CEO of Innate Immunotherapeutics, where the former congressman was on the board of directors and held nearly 17% of company stock (Source: Rep. Chris Collins Resigns Before Expected Guilty Plea in Insider Trading, The New York Times). The chief executive told him the company had recently failed a clinic test for a multiple sclerosis drug it made. In an attempt to save themselves from potential financial losses, Mr. Collins, his son and Zarsky sold their shares in the company’s stock before the information became public.
Collins’ actions put him at serious risk
The case not only put the ex-representative in legal jeopardy, it also raised ethical concerns over his role in the Energy and Commerce Committee, which oversees the health care industry.
Mr. Collins’ actions can teach others that even those who work for the government can face trouble regarding securities fraud if they are not careful.
Securities fraud charges can be a serious allegation with potential long-term consequences. Luckily, the attorneys at Ford O’Brien, LLP, can give you thorough, robust and professional legal representation in dealing with accusations and financial sector regulators.