On January 17, 2020 former US Representative Chris Collins was sentenced to 26 months in prison for his role in an insider trading scheme, and for making false statements to the Federal Bureau of Investigation. According to the superseding indictment and facts elicited during the proceedings, in June 2017 while serving on the board of directors of Innate Immunotherapeutics Ltd, Collins learned confidential non-public information about the results of an important Innate drug trial – information that, according to the indictment, Collins owed a duty of trust and confidence not to release. Instead, Collins communicated the information to his son, Cameron Collins, who held shares in Innate, and traded on the information to avoid losses from the negative drug trial results; Cameron Collins in turn tipped Stephen Zarsky, his fiancée’s father, and three other individuals. Together, Collins, Zarsky, and the other tippees avoided losses amounting to over $768,000 by trading on the confidential non-public information in advance of its public release.
In addition to two concurrent sentences of 26 months in prison, Chris Collins was ordered to pay a $200,000 fine. Cameron Collins and Stephen Zarsky each pleaded guilty to one count of conspiring to commit securities fraud in October 2019, and are scheduled to be sentenced on January 23, 2020.
In a parallel case, Collins, Cameron Collins and Zarsky settled insider trading charges with the US Securities and Exchange Commission in December 2019.