Ex-Congressman’s Son Admits Guilt in Insider-Trading Case

(Bloomberg) -- The son of former New York Congressman Chris Collins admitted his guilt in an insider-trading case, two days after his father confessed to tipping him off to the negative results of a clinical trial by an Australian biotechnology company.

Cameron Collins, 26, pleaded guilty on Thursday to one count of conspiracy to commit securities fraud before U.S. District Judge Vernon Broderick in Manhattan. Under a plea deal, prosecutors agreed to recommend a sentence of 37 to 46 months in prison. He’s scheduled to be sentenced Jan. 23.

His father on Tuesday admitted to the same crime, as well as lying to federal investigators. The former Republican congressman is slated to learn his punishment on Jan. 17, with prosecutors recommending 46 to 57 months.

Chris Collins was the first congressman to endorse Donald Trump for president. Under the circumstances, his departure is likely to help the Republican Party, in his solidly GOP western New York district. Democrats may also use the case as they build their argument against the Republicans in the 2020 election.

Chris Collins admitted that while standing on the South Lawn of the White House for an event in June 2017, he got an email from Innate Immunotherapeutics’ chief executive officer advising him that a clinical trial for a drug being developed to treat a form of multiple sclerosis had failed.

The congressman, who sat on the company’s board, said he immediately phoned his son, a shareholder, allowing him to dump his stake before the news was announced publicly. Prosecutors said Cameron passed the news on to his fiancee, her parents and a friend, allowing them to sell more than 1.78 million Innate shares ad avoid losses of about $768,000.

On Thursday, the younger Collins admitted he got confidential information about the results of the trial, passed them on to friends and family members so they wouldn’t lose money and sold his own stake.

“I truly regret my conduct,” Cameron Collins said.

One of those who received the tip was Stephen Zarsky, the father of his fiancee, who also pleaded guilty on Thursday to one count of conspiracy to commit securities fraud, under an agreement with prosecutors to recommend he spend 37 to 46 months in prison. Zarsky, his voice breaking, said he was beside himself over the possibility of losing all of his retirement savings and sold his shares “to avoid a major financial loss which I could not afford.”

“My moment of weakness will haunt me for the balance of my days,” said Zarsky, 67, who will be sentenced on Jan. 24.

The case is U.S. v. Collins, 18-cr-567, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey

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