GOP Congressman Chris Collins arrested for securities fraud after Sec. Ross accused of embezzlement

UPDATE — 8/11, 10:37 a.m. EDT: Congressman Chris Collins announced via Twitter Saturday he will no longer seek reelection for New York’s 27th District seat after vowing to remain in the race following multiple securities fraud charges leveled against him earlier this week.

In his statement, Collins cited partisan reasons for his decision, namely an effort by House Democrats to “Impeach Trump” if the current minority party wins majority control in November.

According to the Erie County Republican Party chair, GOP leaders from all eight counties which make up the district will select Collins’ replacement.

 

Rep. Chris Collins (R-N.Y.), the first congressional member to endorse Donald Trump’s candidacy for president in 2016, has been arrested on federal charges of complicity in an illegal insider trading scheme in which he avoided substantial personal financial losses while a stockholder and member of the board of an Australian biotech firm.

Charged alongside with Collins is his son, Cameron, and a third man, Stephen Zarsky, the father of Cameron Collins’ fiance.

Collins, who surrendered to the FBI Wednesday morning, is charged with his son on seven counts of securities fraud, conspiracy to commit wire fraud and making false statements.  Mr. Zarsky faces four charges of securities fraud, conspiracy to commit wire fraud, and making false statements.

All three men pleaded not guilty in court and were released on $500,000 bail.

Immediately after his indictment, House Speaker Paul Ryan stripped Collins of his membership on the Energy and Commerce Committee.

“Insider trading is a clear violation of the public trust.” Ryan said in a statement.

According to the DOJ indictment, Collins is alleged to have received nonpublic information from Australia-based biotech firm Innate Immunotherapeutics Limited regarding the failed trial of a drug intended to treat the advanced form of central nervous disorder, multiple sclerosis.

Prosecutors say Collins, who also sat on Innate’s board between 2014 and 2017, took the information and passed it to his son for the purpose of allowing Cameron Collins adequate time to liquidate his holdings in Innate prior to the stock plummeting.  Shortly after being informed of the failed drug trial, Cameron Collins, his fiance, Lauren Zarsky, Stephen Zarsky and Zarsky’s wife, Dorothy, sold their Innate shares.

In addition to serving as a member of Innate’s board, Chris Collins owns as many as 4 million shares of Innate valued in excess of $1 million.

Just as the indictments were handed down Wednesday, the Securities and Exchange Commission (SEC) announced it had reached an agreement to settle charges against Lauren and Dorothy Zarsky.

Collins, who has represented New York’s 27th District since 2013 has said he will neither step down nor decline to drop his reelection bid in November.

In a statement describing the indictment as “meritless,” Collins said:

“The charges that have been levied against me are meritless and I will mount a vigorous defense in court 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.”

News of Collins’ arrest comes a day after Forbes reported Commerce Secretary Wilbur Ross allegedly embezzled more than an estimated $120 million through his private equity firm,  WL Ross & Co., which he ran from 2000–2006.

 

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