NEW YORK: Christopher Collins, a Republican US congressman from New York state who was one of President Donald Trump's earliest supporters, was criminally charged on Wednesday with taking part in an insider trading scheme involving an Australian biotechnology company on whose board he served.
The indictment came as Collins, 68, was seeking a fourth two-year term in November's elections, where Democrats hope to recapture the House of Representatives.
Two lawyers for Collins, Jonathan Barr and Jonathan New, said in a statement that they were confident he would be "completely vindicated and exonerated," and that they would "mount a vigorous defence to clear his good name."
The indictment charged Collins, his son Cameron, and Stephen Zarsky, the father of Cameron Collins' fiancée, with securities fraud, wire fraud and other crimes. All three also face civil charges by the US Securities and Exchange Commission.
Amanda Bassen, a lawyer for Zarsky, declined to comment. Lawyers for Cameron Collins could not immediately be reached. All three defendants were expected to appear in the US District Court in Manhattan later Wednesday.
The case related to Innate Immunotherapeutics Ltd, where Christopher Collins sat on the board and held a 16.8% stake.
Prosecutors said that in June 2017, Collins learned in an email from Innate's chief executive that a trial for its proposed secondary multiple sclerosis drug MIS416 had failed.
According to the indictment, Collins passed that information on to his son, who in turn passed the news to his fiancee, Zarsky and a friend. Zarsky went on to tip his brother, his sister and a friend, the indictment said.
Christopher Collins did not trade his own Innate stock, which lost millions of dollars in value, according to the indictment.
Prosecutors said the congressman knew he was "virtually precluded" from trading in part because he already faced a congressional ethics probe related to his Innate holdings.
However, prosecutors said others avoided more than $768,000 in losses when Innate's share price plunged to 3.5 cents from 45 cents after the drug trial results were announced.
Innate, which is based in Sydney, did not immediately respond to a request for comment outside business hours.
Collins represents New York's solidly Republican 27th Congressional District, and non-partisan analysts predict he will win re-election. The district includes areas surrounding Buffalo and Rochester in the northwestern part of the state.
Last October, the Office of Congressional Ethics said in a report that it had "substantial reason" to believe Collins may have used his office to help Innate.