Chris Collins, Republican Congressman representing New York’s 27th District, was convicted on Jan. 17 of federal securities fraud and lying to the FBI. He was sentenced to 26 months in jail, a $200,000 fine, and a year of supervised release. Collins narrowly won his last election despite the charges, defeating challenger Nate MacMurray. However, he has since resigned the post, leaving the district unrepresented. Governor Andrew Cuomo has tentatively scheduled a new election for April 28, the date of the Presidential primary, to fill the seat.
Collins learned of a clinical failure of a drug hoped to treat Multiple Sclerosis as a board member of an Australian firm, Innate Immunotherapeutics in June 2017. He immediately contacted his son Cameron, who had several million shares in the company to tell him of the failure. Based on the information his father had given him, Cameron Collins sold before It was publicly announced, avoiding $800,000 in losses. Young Collins then told his girlfriend’s father, Stephen Zarsky, who sold his shares immediately also. When the clinical failures were publicly announced, stocks dropped more than 90 per cent.
At first, Chris Collins pled not guilty to the insider trading charges, and announced he was still running for another term, which he won. However, several months ago, he changed his plea, resigned from his post, and moved to Florida.
Collins’ son and Stephen Zarsky, Collins’ son’s girlfriend’s father, were also charged with federal securities fraud. They both ple d guilty. They will not be sentenced until late January, but federal prosecutors are asking for a sentence of six months in prison and $20,000 fines for each of them.