Rep. Christopher Collins bought millions of dollars in stocks in an Australian drug company — and convinced five other GOP lawmakers to invest — all while pushing legislation aimed at helping the company succeed, according to a report.
Collins, a congressman representing New York’s 27th District — which includes parts of Buffalo and Rochester — convinced his chief of staff and several colleagues in the House to buy into Innate Immunotherapeutics, before the company’s stock crashed after its only drug failed a clinical trial.
Among the company’s investors were Collins’ daughter, Caitlin, his son, Cameron, and Rep.s Tom Price, the former Health and Human Services secretary who previously represented Georgia, Mike Conaway of Texas, Doug Lamborn of Colorado, Billy Long of Missouri and Markwayne Mullin of Oklahoma, the Daily Beast reported last year.
Collins’ cronies made up about 30 percent of Innate’s shareholders — and the 69-year-old himself held a majority stake with 16.5 percent of the stock, worth $22 million.
“Do you know how many millionaires I’ve made in Buffalo the past few months?” he allegedly boasted while on a phone call on Capitol Hill.
Collins came under scrutiny when, after purchasing millions of dollars of stock in Innate off its IPO in 2013, he wrote into a bill, called the “21st Century Cures Act,” language that would help expedite the FDA’s approval process for drugs like the one the company was developing.
Collins bought another $1 million in Innate stock four months before that bill was signed into law, congressional financial disclosure records showed.
The Office of Congressional Ethics and the House Ethics Committee launched an investigation into Collins’ stake in Innate as a potential conflict of interest.
On a 2014 financial disclosure form, Collins said he hadn’t participated in any IPO — but he was technically covered thanks to a loophole that requires members of Congress to disclose when they’re involved only in US IPOs, not foreign ones, the Daily Beast noted.
“It’s one thing for a member of Congress to simply vote on something like this, and it’s entirely another for that person to have been the one leading the charge on it,” former Federal Elections Commission lawyer Larry Noble told the site. “This is a very serious conflict of interest matter. There’s a lot financially at stake for him, and there’s a serious question of whether or not he put a provision in a statute that will benefit that financial upside.”
Collins, Long and Mullin had served on the Health Subcommitteee of the Committee on Energy and Commerce — which played a pivotal role in approving FDA-related laws.
At the time, Collins’ spokesman maintained he did nothing illegal.
“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.
Collins was charged Wednesday with insider trading for tipping off his son, Cameron, one of Innate’s top shareholders, ahead of time that the company’s multiple sclerosis drug MIS416 failed a clinical trial — a development that caused Innate’s stock to plummet 92 percent last year.
Cameron, in turn, urged others — including his fiancee, her father, Stephen Zarsky, and his wife, and friends — to also dump their stocks before the news went public.
Cameron and Zarsky are also charged.
The tip-off allowed Cameron, Zarsky and others to dodge more than $768,000 in losses.
The Daily Beast said last year that Collins’ daughter, Caitlin, was the company’s fifth-largest shareholder and his son, Cameron, was its sixth-largest.
Price resigned from his post last September after blowing $400,000 on chartered flights.
