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Chris Collins arrested; attorneys vow to mount 'vigorous defense'

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Wed, Aug 8th 2018 12:20 pm
Geoffrey S. Berman, the U.S. 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, announced Wednesday the arrests of Chris Collins, a congressman representing the 27th District of New York; Cameron Collins, the son of Chris Collins; and Stephen Zarsky, the father of Cameron Collins' fiancée. They were arrested 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 Chris Collins served.
As alleged in the indictment, in June 2017, Chris 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.
Authorities said that, as a result of Chris 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, Chris Collins, Cameron Collins and Zarsky allegedly each made false statements to cover up their participation in the insider-trading scheme. 
Chris 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 Wednesday morning and will be presented and arraigned at 2:30 p.m. today before U.S. District Judge Vernon S. Broderick in federal court in the Southern District of New York. 
In a separate action, the U.S. Securities and Exchange Commission filed a civil action against Chris Collins, Cameron Collins and Zarsky.
Berman said: "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. 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. 
"Rep. 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." 
Sweeney 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." 
Following this news, Jonathan Barr and Jonathan New of Baker Hostetler, attorneys for Chris Collins, released a statement that read, "We will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name. It is notable that even the government does not allege that Congressman Collins traded a single share of Innate Therapeutics stock. We are confident he will be completely vindicated and exonerated.
"Congressman Collins will have more to say on this issue later today."
Collins is a Republican. Democrat Congressman Brian Higgins was quick to pounce. He released a statement that said, "The allegations included in the indictment against Rep. Chris Collins can be summed up in one word: shameful.
"These charges, including insider trading, conspiracy to commit fraud, and lying to federal officials, laid out by professionals within the Justice Department and FBI, are backed up by comprehensive evidence of these very serious offenses.
"I am confident that, in due course, justice will be served."
Chris Collins is running for re-election this fall. His opponent, Grand Island Supervisor Nate McMurray, has scheduled his own press conference for 2 p.m. this afternoon in Hamburg.
McMurray, in a subsequent press release, wrote that the arrest of Chris Collins on insider trading charges underscores the reasons he's challenging Collins in 27th Congressional District.
"This is why I got in this race, because I understand that the man who claims to represent this community doesn't actually represent it," McMurray said. "Chris Collins has openly admitted that he serves only wealthy donors and that his proudest accomplishment is making millions for his friends here in Western New York and in Washington. That's not what Congress is for and not what our democracy is about.
"Today's allegations by the U.S. attorney were shocking and sad, but not surprising - this has been unfolding, piece by piece, for many months. Anyone who's been paying attention knows what's going on. And now the jig is up, because, no matter how this is spun, it's clear that the swamp is alive and well in Washington, D.C."

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