News World Trump backer Chris Collins arrested over Australian insider trading scheme

Trump backer Chris Collins arrested over Australian insider trading scheme

Trump backer Chris Collins charged over insider trading in Australian company
Collins allegedly avoided hundreds of thousands of losses in the Australian company. Photo: Getty
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US politician Christopher Collins, one of the earliest supporters of Donald Trump’s bid for the presidency, has been arrested over an insider trading scheme focused on an Australian company.

Mr Collins, a congressman from New York, surrendered to police Thursday morning on charges that he, his son and the father of his son’s fiancée used inside information to avoid US$768,000 ($1,033,000) in potential losses in Melbourne-based pharmaceutical company, Innate Immunotherapeutics Limited.

Mr Collins was a member of the Innate board at the time, as well as its largest shareholder holding almost 17 per cent. of its stock.

“These charges are a reminder that this is a nation of laws and that everybody stands equal before the bar of justice,” US Attorney for the Southern District of New York, Geoffrey Berman told in a news conference.

Mr Berman said Mr Collins “placed his family and friends above the public good,” and “cheated our markets and our justice system.”

New York prosecutors allege Mr Collins passed on advanced results of the disappointing trial of Innate’s only drug – a multiple sclerosis treatment known as MIS416 the Associated Press reported.

According to the indictment, Mr Collins was attending the Congressional Picnic at the White House on June 22, 2017 when he received an email from the company’s chief executive saying that a trial the drug was a clinical failure.

The next morning, according to the indictment, Mr Collins began selling his shares and over the next two days personally avoiding $US570,900 ($768,000) in losses before the public announcement of the drug trial results.

After a public announcement, the company’s stock price plunged 92 per cent, the AP reported.

Prosecutors said Mr Collins’ son, Cameron, also traded on the inside information and passed it to his fiancée’s father Stephen Zarsky. They said Mr Zarsky traded on the information and tipped off at least three other people.

Mr Collins, a Republican who was first elected in 2012, has denied any wrongdoing.

“We will answer the charges filed against Congressman Collins in court and will mount a vigorous defence to clear his good name,” his lawyers, Jonathan Barr and Jonathan New, said in a statement on Wednesday.

“We are confident he will be completely vindicated and exonerated,” they said.

Mr Collins has been a vocal supporter of the President, most recently calling for an end to Special Counsel Robert Mueller’s probe into Russian collusion by the Trump election campaign.

“I share President Trump’s continued frustration as the left continues to try to nullify the 2016 Presidential election with claims of Russian interference,” he said.

House Speaker Paul Ryan said he was removing Mr Collins from the House Energy and Commerce Committee, calling insider trading “a clear violation of the public trust”.

The advocacy group Public Citizen filed a request for an investigation of Mr Collins’ stock dealings with the Office of Congressional Ethics and the Securities and Exchange Commission in January of 2017.

-with agencies

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