Rep. Chris Collins, one of the wealthiest members of Congress, was arrested on charges insider trading on Wednesday.
Collins, a Republican from New York, served on the board of an Australian biotechnology company called Innate Immunotherapeutics, and was also the company’s largest shareholder. According to the complaint, he passed inside information regarding the results of a negative test trial for a drug the company was producing to treat multiple sclerosis on to his son, who relayed the information on to his fiancé’s father. Both of those men traded on the tips before the results were public, and are also charged in the indictment.
They are said to have avoided at least $768,000 in potential losses by selling before the negative trial results were made public. Shares dropped 92% after the announcement.
Successful completion of the trial was necessary for commercialization of the production in the U.S., which was intended to treat secondary progressive multiple sclerosis, a stage of the disease that indicates the patient’s condition is worsening despite treatment.
Collins is estimated to be the 13th wealthiest member of Congress, with a projected net worth of $44 million.
Collins’ lawyers noted in a statement that the government has not said the congressman traded any shares of the stock.
“We will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name … We are confident he will be completely vindicated and exonerated,” attorneys for Rep. Collins said in a statement on Wednesday.
According to the filing, Collins’ own stock declined by millions of dollars in value when the results of the trial were made public.