Three-term GOP congressman Chris Collins was indicted for insider trading after prosecutors determined that after Innate Immunotherapeutics alerted him to the failure of company’s clinical drug trials for a promising multiple sclerosis drug, Collins tipped off his son, allowing him and others to save hundreds of thousands of dollars by selling their stock in the firm before the news was made public. Now Collins faces prison time if convicted.
Collins was a member of the company’s board until May of this year, and at one point was its largest shareholder.
Speaker of the House Paul Ryan has stripped Collins of his seat on the Energy and Commerce Committee and asked the House Ethics Committee to investigate the allegations of insider trading. Collins has ended his re-election bid, but maintains that he is innocent. Such statements are like the puzzle about the White Foot and Black Foot tribes that look and sound identical but have one difference: the White Feet always lie, and the Black Feet always tell the truth. If you ask a member of either tribe, “Are you a truthful Black Foot or a lying White Foot?”, you will always get the same answer no matter what tribe the individual belongs to: “I am a truthful Black Foot!” And whether an indicted Congressman is guilty or innocent, he will always say, as Collins did, that the charges are “meritless” and that he will fight them to have his “good name cleared of any wrongdoing.”
Until the plea deal.
Collins’s involvement with Innate dates back all the way to 2005, before he ran for Congress. He organized support from wealthy friends and neighbors, many of whom would later become his political donors, to help bail out the company, which was flailing at the time. In addition to Innate Immunotherapeutics, Collins has held leadership roles in other biotech companies. Until his indictment, he was chairman of the board of directors of ZeptoMetrix, a private lab company based in Buffalo that he co-founded. That one has received millions of dollars in federal contracts, according to government records.
Collins reported owning between $25 million and $50 million in shares of ZeptoMetrix. In June, he sold about a million dollars of stock in Chembio Diagnostics, a medical tests and equipment manufacturer, according to his ethics disclosure forms.
The congressional ethics office found last summer that Collins may have violated ethics rules by asking the National Institutes of Health for help with the design of Innate’s now-failed clinical trial.
Observations: Continue reading