Collins got the news of the drug trial in a June 2017 email from the company's chief executive officer while attending an event on the South Lawn of the White House.
It had the potential to be a big moneymaker for the company since there aren't many treatments available for the disease.
"In the hours and days after learning of the drug trial results, [Collins], his son and their associates exchanged a flurry of calls", said Steven Peikin, co-director of the U.S. Securities and Exchange Commission (SEC) enforcement division. It didn't show any promise in treating the disease.
Charging documents said Innate was testing a drug called MIS416, to see if it was an effective treatment for Secondary Progressive Multiple Sclerosis.
"Despite the continued partisan attacks insinuating otherwise, Congressman Collins has followed all ethical guidelines related to his personal finances during his time in the House and will continue to do so", Michael McAdams told the Daily Beast. During the tax reform debate, when his fellow New York GOP members of Congress were up in arms about a provision that would likely raise taxes on many New Yorkers, Collins voiced support for the plan. "How are these results even possible???" he wrote to the CEO of Innate.
The U.S. Attorney's Office for the Southern District is scheduled to hold a press conference on the matter at noon.
The Office of Congressional Ethics recommended the House ethics committee dismiss a third charge against Collins regarding a discount he received on a private sale of Innate stock because he was a member of Congress.
Over the next few days, however, Cameron Collins sold off almost 1.4 million shares of Innate stock.
A year and a half into being president, Trump has gotten rid of two Cabinet secretaries over alleged ethical violations (Tom Price and Scott Pruitt); his national security adviser for lying about his Russian Federation contacts (Michael Flynn); a top White House aide over alleged allegations that he assaulted two of his ex-wives (Rob Porter); and he demoted his White House doctor who was accused of drinking on the job (Ronny L. Jackson, a holdover from the Obama administration) after the Senate wouldn't confirm Jackson to lead the Department of Veterans Affairs.
At least six other politicians have recently owned or sold stock in Innate Immunotherapeutics, the Austrailian company at the center of New York Republican Rep.
After markets closed on June 26, Innate announced the news of the failed drug trial public. Shares dropped 92% after the announcement.
The indictment charges Collins and two others, including the congressman's son, with conspiracy, wire fraud and other counts.
The congressman spoke to the Federal Bureau of Investigation on April 25, 2018. Cameron Collins, son of the 68-year-old legislator, was also arrested, along with Stephen Zarsky, whose daughter is engaged to the younger Collins. Within minutes, Collins telephoned his son, who then passed the information along to others.