Ex-Congressman’s Son Avoids Prison for Insider Trading

(Bloomberg) -- The son of former Republican Congressman Christopher Collins was spared a prison sentence for trading on confidential information provided by his father about an Australian biotechnology company.

U.S. District Judge Vernon Broderick in New York on Thursday ordered five years of probation for Cameron Collins, 27, who pleaded guilty to a single count of conspiracy in October. Collins admitted he received a tip about the results of a failed trial for a multiple sclerosis drug developed by Innate Immunotherapeutics, where his father served on the board.

His father, the first congressman to endorse Donald Trump for president, was ordered last week to spend 26 months in prison. The elder Collins resigned his New York congressional seat in October and pleaded guilty to conspiracy to commit securities fraud and lying to federal investigators. He admitted calling his son in June 2017 after getting an email from Innate’s chief executive officer about the clinical trial.

The case was the first insider-trading prosecution against a sitting congressman. Collins solicited investments in Innate from fellow lawmakers, and at least five other Republican House members bought shares in the company. Shortly after Collins’s indictment, the House introduced a bill barring members from serving on the boards of publicly traded companies. It hasn’t passed into law yet.

Cameron Collins, his fiancee, her parents and a friend sold more than 1.78 million shares before the news of the failed drug trial became public, avoiding losses of almost $757,000, the government said. Prosecutors had asked the judge to order him to serve as long as 26 months in prison.

His fiancee’s father, Stephen Zarsky, also pleaded guilty in the case and is scheduled to be sentenced Friday.

“I wish I could go back and make the right choices,” Collins told the judge. “What I did was wrong. I’m not going to deny that. Dead wrong. I should have made better choices when my father told me about the trial and when the FBI came to my house.”

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

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, Steve Stroth

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