New York congressman resigns ahead of insider trading plea

[October 01, 2019]  By Brendan Pierson and Richard Cowan

NEW YORK/WASHINGTON (Reuters) - Chris Collins, a Republican U.S. congressman from New York state, resigned on Monday ahead of his expected guilty plea in a criminal insider trading case.

A senior Democratic aide speaking on condition of anonymity said Monday that the office of U.S. House of Representatives Speaker Nancy Pelosi had received Collins' letter of resignation, and that it would become effective Tuesday.

Collins, 69, is scheduled to appear in Manhattan federal that day to enter his guilty plea, court records show. Collins' son, Cameron Collins, and another man, Stephen Zarsky, are also scheduled to plead guilty in the case on Thursday.

A spokesman for U.S. Attorney Geoffrey Berman, whose office is prosecuting the case, declined to comment, as did Mauro Wolfe, a lawyer for Zarsky.

Lawyers for Chris and Cameron Collins could not immediately be reached.

Chris Collins, an early supporter of President Donald Trump, represents New York's 27th Congressional District, which includes areas surrounding Buffalo and Rochester. He won reelection last November, three months after he was criminally charged.

The criminal case relates to Australian biotechnology company Innate Immunotherapeutics Ltd, a company for which Chris Collins sat on the board and held a 16.8% stake.

Prosecutors allege 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 clinical trial for its proposed multiple sclerosis drug MIS416 had failed.

U.S. Representative Chris Collins is interviewed during the 2017 "Congress of Tomorrow" Joint Republican Issues Conference in Philadelphia, Pennsylvania, U.S. January 25, 2017. REUTERS/Mark Makela/File Photo

Collins immediately told the trial failure news to his son, who in turn told his fiancée, Lauren Zarsky, and her parents, Dorothy and Stephen Zarsky, prosecutors allege.

Chris Collins did not trade his own Innate stock, which lost millions of dollars in value. 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% after news of the drug's failure became public.

Lauren and Dorothy Zarsky were not criminally charged, but reached civil settlements with the U.S. Securities and Exchange Commission.

(Reporting By Brendan Pierson in New York and Richard Cowan in Washington; Editing by Bill Berkrot and Nick Zieminski)
 

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