A former U.S. Representative for New York's 27th Congressional District, his son and a third individual settled SEC charges for insider trading.
According to the SEC Complaint filed in the U.S. District Court for the Southern District of New York, Christopher Collins (R-NY) learned of material, nonpublic information concerning the clinical failure of a drug under development at Innate Immunotherapeutics, Ltd. ("Innate"). Mr. Collins, who was a member of the board of directors at Innate, relayed the information to his son, who tipped off, among others, his then-girlfriend's family. The girlfriend's father, Stephen Zarsky, also informed other individuals of the clinical failure. Mr. Collins's son, Mr. Zarsky and their tippees sold their respective shares in the drug company before the negative drug results were announced, collectively avoiding approximately $768,600 in losses.
Mr. Collins, his son and Mr. Zarsky each settled insider trading charges and agreed to permanent injunctions from future violations of the anti-fraud provisions under the securities laws. In addition:
- Mr. Collins agreed to a permanent ban from serving as an officer or director of any public company;
- Mr. Collins' son agreed to disgorge $570,900 plus prejudgment interest of $63,399; and
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Mr. Zarsky agreed to disgorge $143,900 plus prejudgment interest of $15,980.
In October 2019, the defendants each pleaded guilty (see here and here) to DOJ charges of insider trading. Mr. Collins also admitted to making false statements to the FBI and is scheduled to be sentenced on January 17, 2020.
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