Republican congressman Chris Collins, one of the first US lawmakers to declare support for Donald Trump's presidential candidacy, was indicted by federal prosecutors Wednesday on charges of securities fraud connected to an alleged insider trading scheme.
Collins, 68, was arrested and charged along with his son Cameron Collins and another defendant for their role in illegal trading of stock in Australian biotechnology firm Innate Immunotherapeutics, where the elder Collins was a board member, according to the indictment released by the US Attorney for the Southern District of New York.
The congressman is accused of tipping off his son about the results of Innate's failed drug trial before the results were publicly released in June 2017.
Collins broke the law by "passing material, nonpublic information regarding the drug trial results to his son... so that Cameron Collins could use that information to make timely trades in Innate stock and tip others," the indictment alleges.
Cameron Collins is accused of passing on that information to his fiancee's father, Stephen Zarsky, and others, who also benefited financially from the insider knowledge.
The trades allowed the Collinses, Zarsky and others "to avoid over $768,000 in losses that they would have otherwise incurred" if they sold the stock after the announcement, according to the indictment.
On the day after the trial results were released, the company's stock lost 92 percent of its value.
Chris Collins' lawyers responded swiftly, insisting he will be "completely vindicated."
"We will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name," they said in a statement.
Collins, who represents Buffalo's suburbs and counties in upstate New York, was the first House Republican to openly support Trump's bid for the party's nomination in the 2016 race, and he has remained a loyalist to the president.