Rep. Christopher Collins purchased millions of dollars of shares in an Australian drug company while convincing five other GOP lawmakers to invest also. All while pushing through legislation that was aimed at helping the company succeed.
Collins is a congressman who represents New York’s 27th district which includes Buffalo and Rochester. Collins managed to convince his chief of staff, along with several of his colleagues in the House, to purchase shares of Innate immunotherapeutics directly before the company’s stock crashed after its only drug failed its clinical trial.
Among Innate’s top investors were Collin’s daughter Caitlin, his son, Cameron, and congressional members Tom Price, the former Health and Human Services secretary who previously represented Georgia. As well as Mike Conaway of Billy Long of Missouri, and Markwayne Mullin of Oklahoma, the Daily Beast reported last year.
Collin and his comrades made up 30% of Innate’s shareholders, with the 69 year old Collins holding the majority share of 16.5% himself. His majority stake in the stock was worth a grand total of $22 million.
“Do you know how many millionaires I’ve made in Buffalo the past few months?” he allegedly boasted while on a phone call on Capitol Hill.
Collins came under scrutiny following his purchase of millions of dollars of stock in Innate when it launched its IPO in 2013. He then went on to write a bill called the “21st Century Cures Act,” which ended up being in language that would help the FDA expedite their approval process for drugs like the one Innate was in the process of developing.
Collins then continued on buying another million dollars worth of Innate stock four months prior to the bill being signed into law, which is shown in the congressional financial disclosure records.
This propelled an investigation into Collins by the Office of Congressional Ethics and the House Ethics Committee, on the grounds that his stake in Innate created a conflict of interest.
On a 2014 financial disclosure form, Collins stated that he had not participated in any IPO-but technically he was legally covered thanks to a loophole that requires members of Congress to disclose when they are involved in US IPO’s, not foreign ones, the Daily Beast had reported.
“It’s one thing for a member of Congress to simply vote on something like this, and it’s entirely another for that person to have been the one leading the charge on it,” former Federal Elections Commissioner lawyer Larry Noble told the NY Post. “This is a very serious conflict of interest matter. There’s a lot financially at stake for him, and there’s a serious question of whether or not he put a provision in a statute that will benefit that financial upside.”
Collins, Long and Mullin had all served on the Health Subcommittee of the Committee on Energy and Commerce- which played a key role in approving FDA related laws.
At the time, Collins spokesperson maintained that he had done nothing illegal.
“Despite the continued partisan attacks insinuating otherwise, Congressman Collins has followed all ethical guidelines related to his personal finances duirng his time in the House and will continue to do so,” Michael McAdams told the Daily Beast.
On Wednesday Collins was charged with insider trading for tipping off his son Cameron, also one of Innate’s top shareholders, prior to the public release that Innate’s Multiple Sclerosis drug MIS416 had failed its clinical trial- news that when shared with the public caused Innate’s stock to fall 92% last year.
After hearing the news, Cameron then began to urge others including his fiance, her father Stephen Zarsky and his wife, along with friends who held shares, to quickly get rid of their shares as well before the news went public.
Cameron and Zarsky are also facing charges.
This tip off by Cameron enabled Cameron, Zarsky and others to evade over $768,000 in losses.
The Daily Beast also reported that last year Collin’s daughter, Caitlin, was the company’s fifth largest shareholder and his son, Cameron, was its sixth.
Price has resigned from his post as of last September after squandering $400,000 on chartered flights.