BioPharma, Legal

Ex-Rep. Collins sentenced to 2 years in prison for biotech insider trading, lying to FBI

Collins, a Republican who represented New York’s 27th district, was arrested in August 2018 on charges of insider trading related to his membership on the board of Australian biotech Innate Immunotherapeutics.

Former congressman Chris Collins will spend the next two years in prison for insider trading and lying to FBI agents, a federal judge ruled Friday.

Vernon Broderick, judge for the U.S. District Court for the Southern District of New York, sentenced Collins to 26 months. Collins, who was arrested by federal agents in August 2018, resigned from the House of Representatives at the end of September 2019 and pleaded guilty to the charges. A Republican, he had represented New York’s 27th district, in the western part of the state, since 2013.

The charges were related to Collins’ membership on the board of directors of Innate Immunotherapeutics, a Sydney, Australia-based biotech company in which he owned a 16.8% stake, a position that had already prompted an investigation by the Office of Congressional Ethics. According to the 2018 indictment, in June 2017, Collins passed what had been confidential negative results from a Phase IIb clinical trial of Innate’s multiple sclerosis drug, MIS416, to his son, Cameron, in a phone call from the White House lawn. Cameron, who owned a 2.3% stake in the company, then allegedly sold nearly 1.4 million shares over several days before the results were made public. Innate’s stock fell 90% on the Australian Stock Exchange when news of the results was announced; although the company had suspended trading on the ASX ahead of the news, the shares were still traded on the over-the-counter exchange in the U.S. The scheme allegedly allowed Collins and co-conspirators to avoid $768,000 in losses that they would have incurred had they waited for the results to become public.

“Collins’ greed and disregard for the law have now led to a criminal conviction for insider trading and lying to the FBI, his resignation from Congress and over two years in federal prison,” U.S. Attorney Geoffrey Berman said in a statement. “Lawmakers bear the profound privilege and responsibility of writing and passing laws, but equally as important, the absolute obligation of following them.”

Photo: Scott Heins, Getty Images