Prosecutors alleged that Collins, who served on the board of a pharmaceutical company, passed along the undisclosed results of a drug trial to his son "to make timely trades" to avoid over $700,000 in losses.
ADVERTISEMENTFormer GOP Rep. Chris Collins pleaded guilty to insider trading and lying to the FBI on Tuesday, hours after he resigned his New York congressional seat.
Collins, who was the first member of Congress to endorse Donald Trump for president in 2016, was indicted in August by the U.S. attorney's office in Manhattan. He was accused of using non-public information stemming from his relationship with an Australian medical biotech firm to help his family make illegal stock trades to avoid more than $768,000 in losses. He initially pleaded not guilty after he was first charged in 2018.
His son Cameron Collins, as well as Stephen Zarsky, the father of Cameron Collins' fiancée, were also charged with insider trading. The men were also charged with lying to the FBI in interviews to cover up the alleged scheme.
Collins, 68, on Monday sent a letter of resignation to House Speaker Nancy Pelosi. His resignation became official on Tuesday after the letter was read on the House floor.
Collins represented New York's 27th congressional seat — a suburban district that includes parts of Buffalo. Trump won the district by 24 points in 2016 and the seat has been generally viewed as a safe seat for the GOP in the otherwise blue state. The Cook Political Report rated the district as "solid Republican" on Monday, suggesting that the scandal has not hampered the GOP's grip on the area. Under New York State law, Gov. Andrew Cuomo, a Democrat, has the authority to set a date for a special election to fill the seat.
Collins served on the board of Innate Immunotherapeutics, a small Australian pharmaceutical company, for three years until 2017 and was one of its biggest shareholders with a nearly 17 percent ownership stake.
Prosecutors alleged that Collins passed along the yet undisclosed results of a drug trial intended to treat an advanced form of multiple sclerosis to his son in June 2017. He intended for Cameron Collins to "use that information to make timely trades in Innate stock and tip others," according to prosecutors. When the news of the failed drug trial was made public the stock value fell 92 percent.
Collins was on the lawn of the White House attending a congressional picnic in June 2017 when Innate's chief executive sent an email to the board of directors reporting that the trial was a bust, according to the indictment.
Then, within six minutes of getting the results, the lawmaker hastily tried to reach his son, who owned more than 2 percent of Innate stock. His son then passed the information from his father to Zarsky and other unnamed co-conspirators, who all engaged in "timely trades" of the stock, prosecutors said.