Congressman Christopher Collins, son charged with insider trading

NEW YORK (Reuters) - Christopher Collins, a Republican U.S. congressman from New York who was one of President Donald Trump's earliest supporters, was criminally charged on Wednesday with taking part in an insider trading scheme involving an Australian biotechnology company on whose board he served.

The indictment came as Collins, 68, was seeking a fourth two-year term in November's elections, where Democrats hope to recapture the House of Representatives.

"These charges are a reminder that this is a nation of laws, and that everybody stands equal before the bar of justice," U.S. Attorney Geoffrey Berman said at a news conference in Manhattan.

Collins said the charges were baseless and he would run for re-election in November in his upstate New York district.

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U.S. Representative Chris Collins (R-NY) flashes a thumbs-up before delivering his nomination speech at the Republican National Convention in Cleveland, Ohio, U.S. July 19, 2016. REUTERS/Jim Young
Representative Chris Collins (R-NY) is seen on a screen as he delivers his nomination speech for Republican U.S. Presidential candidate Donald Trump at the Republican National Convention in Cleveland, Ohio, U.S. July 19, 2016. REUTERS/Mark Kauzlarich
UNITED STATES - JUNE 13: Rep. Chris Collins, R-N.Y., attends a House Energy and Commerce Communications and Technology Subcommittee markup in Rayburn Building on June 13, 2018. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - APRIL 11: Reps. Chris Collins, R-N.Y., right, and Kevin Cramer, R-N.D., attend a House Energy and Commerce Committee in Rayburn Building on the protection of user data featuring testimony by Facebook CEO Mark Zuckerberg on April 11, 2018. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - FEBRUARY 27: Rep. Chris Collins, R-N.Y., leaves the House Republican Conference meeting in the Capitol on Tuesday, Feb. 27, 2018. (Photo By Bill Clark/CQ Roll Call)
UNITED STATES - APRIL 26: Rep. Chris Collins, R-N.Y., leaves a meeting of the House Republican Conference in the Capitol on April 26, 2017. (Photo By Tom Williams/CQ Roll Call)
WASHINGTON, D.C. - FEBRUARY 16: (AFP-OUT) President Donald Trump participates in a congressional listening session with GOP members in the Roosevelt Room of the White House February 16, 2017 in Washington, DC. Also pictured is Rep. Chris Collins (R-NY). (Photo by Ron Sachs-Pool/Getty Images)
WASHINGTON, D.C. - FEBRUARY 16: (AFP-OUT) President Donald Trump participates in a congressional listening session with GOP members in the Roosevelt Room of the White House February 16, 2017 in Washington, DC. Rep. Chris Collins (R-NY) (3rd R). (Photo by Ron Sachs-Pool/Getty Images)
CLEVELAND, OH - JULY 19: Rep. Chris Collins (R-NY) delivers a speech on the second day of the Republican National Convention on July 19, 2016 at the Quicken Loans Arena in Cleveland, Ohio. An estimated 50,000 people are expected in Cleveland, including hundreds of protesters and members of the media. The four-day Republican National Convention kicked off on July 18. (Photo by Alex Wong/Getty Images)
CLEVELAND, OH - JULY 19: Rep. Chris Collins (R-NY) checks the sound while on stage prior to the start of the second day of the Republican National Convention on July 19, 2016 at the Quicken Loans Arena in Cleveland, Ohio. An estimated 50,000 people are expected in Cleveland, including hundreds of protesters and members of the media. The four-day Republican National Convention kicked off on July 18. (Photo by Alex Wong/Getty Images)
Erie County Executive Chris Collins (L) listens as New York State Governor David Patterson (R) speaks at a news conference along with other law enforcement agencies near the Emergency Training Center in Cheektowaga, New York February 13, 2009 in response to a Continental Flight 3407 that crashed with no survivors. REUTERS/Gary Wiepert (UNITED STATES)
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"The charges that have been levied against me are meritless and I will mount a vigorous defense in court to clear my name," Collins told reporters in Buffalo.

"As I fight to clear my name, rest assured I will continue to work hard for the people and constituents of the 27th Congressional District of New York and I will remain on the ballot running for re-election this November," he said.

The indictment charged Collins, his son Cameron, and Stephen Zarsky, the father of CameronCollins' fiancée, with securities fraud, wire fraud and other crimes.

All three defendants pleaded not guilty on Wednesday before U.S. District Judge Vernon Broderick in Manhattan.

Two lawyers for Collins, Jonathan Barr and Jonathan New, said in a statement that they were confident he would be "completely vindicated and exonerated."

"We intend to mount a vigorous defense on behalf of our client," Tom Hanusik and Rebecca Ricigliano, lawyers for Cameron Collins, said in a statement. Amanda Bassen, a lawyer for Zarsky, declined to comment.

The case relates to Innate Immunotherapeutics Ltd <IIL.AX>, where Christopher Collins sat on the board and held a 16.8 percent stake.

Prosecutors said that in June 2017, while attending the congressional picnic at the White House,Collins learned in an email from Innate's chief executive that a trial for its proposed secondary multiple sclerosis drug MIS416 had failed.

According to the indictment, Collins immediately called his son and told him the news. CameronCollins in turn told his fiancée, her parents and a friend, and Stephen Zarsky went on to tip his brother, his sister and a friend, the indictment said.

Christopher Collins did not trade his own Innate stock, which lost millions of dollars in value, according to the indictment. Prosecutors said the congressman was "virtually precluded" from trading in part because he already faced a congressional ethics probe over Innate.

However, prosecutors said others used the insider information to avoid more than $768,000 in losses when Innate's share price plunged 92 percent on news of the drug trial's failure.

Sydney-based Innate did not respond to a request for comment outside business hours.

Collins represents New York's solidly Republican 27th Congressional District, and nonpartisan analysts have predicted he will win re-election. The district includes areas surrounding Buffalo and Rochester.

Last October, the Office of Congressional Ethics reported that it had "substantial reason" to believe Collins may have used his office to help Innate.

It voted unanimously to send its case to the House Ethics Committee. Collins denied wrongdoing.

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