News, analysis and interviews with politicians and observers. When the public trial for the drug was about to be announced as a failure. Want to read a little from the complaint. Mis 416 had the potential to be an enormously profitable if the drug trial was successful. The drug, however, failed the drug trial. Public announcement of these results caused the stock price to drop by 92 . In or about june of 2017, Christopher Collins violated the duties he owed to innate by Passing Material Nonpublic information regarding the Drug Trial Results to his son the defendant so that Cameron Collins could use that information to make timely trades in innate stock and tip others. In detail, it was stunning from the actual complaint itself, those phone calls or the initial ones from the congressman to his sn, they took place on the grounds of the white house, during the white house congressional picnic. Anybody who has been paying attention to Chris Collins on capitol hill the last couple of years it was no secret his role in this company, his belief in this company, how much he touted
this company. Hed talk about it with his colleagues on the house floor, in the house speakers lobby and his lawyers are already making clear they plan on a robust defense. Want to read one piece of a statement which says it is notable that even the government does not allege that Congressman Collins traded a single share of inate stock. Were confident hell be completely vindicated and exonerated. Its worth noting he will be arraigned at 2 30 here in manhattan. And its also worth noting that this was not the first time Congressman Collins and his relationship with this company had come to the fore. Obviously, he had been talking about it regularly. Also significant ethical concerns. The Office Of Congressional Ethics did a detailed investigation into his ties to the company, including showing evidence that he had been Lobbying Members of the government about the company itself. He sat on the committee. The house energy and commerce that oversaw the company. And they House Ethics Committee was engaged in its own investigation related to this. So that issue is not new but the complaint that was laid out
using this to underscore whery y they believe republicans in charge havent been able to deliver and undercut everything President Trump promised on the Campaign Trail about the swamp. Phil, stand by. Lets listen to this press conference. We have our legal analyst standing by with me in studio to share the reporting on their insights after we listen in. Dana bash, michael scheer, karen and niamalika hendson. First well hear from Jeffrey Berman and the investigators up in new york as we wait for this to unfold. Theyre bringing the props into the room. As they start to do that, lets start our conversation and forgive me here we go. Lets go. The Southern District of new york. Today we announced criminal charges against Christopher Collins, a United States congressman. Congressman collins is charged with Insider Trading and lying to the fbi. As alleged in the indictment,Congressman Collins cheated our markets and our Justice System in two ways. First, he tipped his son to confidential Corporate Information at the expense of regular investors, and then he lied about it to Law Enforcement to cover it up. Also charged is his son, Cameron Collins, and steven czarsky, the father of camerons fiance. These charges are a reminder that this is a nation of laws and that everybody stands equal before the bar of justice. Now id like to go into the details of the allegations a little more. In addition to serving in the house of representatives, Congressman Collins was also on the Board Of Directors of innate
immuno therapeutics, a publicly traded company that was developing a drug for Multiple Sclerosis. In june of 2017, Congressman Collins was told some confidential and highly Sensitive Information about innate. Information that was not yet made public. Namely, that innates main drug, the drug innate was developing to be the backbone of its company, was a total failure. This was devastating information for the company. Congressman collins had an obligation, a legal duty to keep that Information Secret until that information was released by the company to the public. But he didnt keep it secret. Instead, as alleged, he decided to commit a crime. Other friends and relatives sold. All because Congressman Collins violated his duty to keep inates Information Secret. And when the news of the drugs failure became public, the stock plummeted. In total, the conspirators used the Inside Information to avoid over 750,000 in losses. But Congressman Collins couldnt keep his crime a secret forever. The fbi asked to interview him, and instead of telling the truth, he lied. And so did Cameron Collins and so did steven czarsky. By lying to the fbi, they compounded their Insider Trading crime with the crime of criminal coverup. Now id like to go over these charges which summarize some of
the allegations in the indictment. The first charge is a tipping change. It demonstrates the flow of the illegal Insider Information and the trading, the illegal trading of that information. At the top of the chain, Congressman Collins. He had an obligation as innate board member when he received confidential Corporate Information to receive that Information Secret until the Company Announced it to the public. In total disregard of that obligation, minutes after Congressman Collins received the devastating, highly confidential news that innates drug had failed its drug trial, Congressman Collins tipped that Inside Information to his son so
that his son could trade. Cameron collins. When he received that illegal Inside Information, he did two things, both of which are illegal. He sold stock based on that Inside Information and avoided 570,000 in losses. And he also took that illegal Inside Information and tipped others. He tipped his fiance. He tipped his fiances wife. He tipped his fiances father and he tipped a friend. All of whom traded on that illegal Inside Information. Steven czarsky, his fiances father, avoided 143,000 in losses by trading on that information and he tipped others. He tipped his brother. He tipped his sister. And he tipped a friend. Two of whom traded on the information. One attempted to trade on the information, but was unable. In total, the conspirators avoided losses of over 768,000 all because of the initial illegal Insider Trading tip by Congressman Collins. In this chart, we set some of the key allegations in the indictment against a timeline, a backdrop of the innate share price. On the evening of june 22nd, 2017, Congressman Collins was at a congressional picnic. And at 6 55, he received an email from the ceo of innate informing him of the horrendous news that the drug had failed
its trial. 7 10 p. M. , Congressman Collins responded to that email. So as the indictment alleges, at least at 7 10 p. M. , Congressman Collins was aware of the Inside Information. A minute later, Congressman Collins attempted to call his son. In a period of five minutes, there are six unsuccessful calls. On the seventh call, 7 16 p. M. , as alleged in the indictment, Congressman Collins tips illegally tips his son cameron about the Drug Trial Results so that his son cameron could trade on those results. Later that evening on june 22nd,
after Cameron Collins has the illegal Insider Trading information, Cameron Collins drives with his fiance to his fiances parents house. They arrive at the house at 9 17 p. M. Less than 20 minutes later at 9 34 p. M. , the fiances mother is on the phone with her broker beginning the process of selling her shares of innate. The next morning on june 23rd, at 7 42 a. M. , Cameron Collins begins the process of selling his shares of innate. During june 23rd and june 26th, Cameron Collins sells approximately 1. 39 million shares of innate. Prior to the market close of june 26. After the market closes, innate announces to the public that its drug had failed the trial. And the next day, the drug price, the price of innate, falls off a cliff. It drops 92 in value in a single day. This was the drop that was anticipated by the coconspirators. This was the drop in value that the coconspirators avoided by selling their shares for the public announcement. And they could only sell those shares by virtue of the initial tip of Inside Information by Congressman Collins. A case of this type and significance, obviously, involves the s. E. C. And the fbi
and their representatives are standing up here with me today. To my left is my good friend bill sweeney, the assistant director in charge of the fbis new york field office. And to the far left is john brosnan, the special agent in charge of the fbi new york office criminal division. The fbis work on this case was spectacular, and i want to thank them for their professionalism and dedication. We work with the fbi on so many important cases, and it is always a privilege. To the left of bill is stephanie and steve pecan who are codirectors of the s. E. C. s division of enforcement. I want to thank them and the s. E. C. For their hard work on this matter. Last, i want to acknowledge and thank the Career Prosecutors in
my office handling the case. To my right is max nicholas, damian williams, bob allen, Scott Hartman and the cochiefs of our securities and Commodities Fraud Task force, tim and jason. Congressman collins who, by virtue of his office, helps to write the laws of our nation acted as if The Law Didnt Apply to him. Charges today demonstrate once again that no matter what the crime and no matter who committed it, we stand committed in the pursuit of Justice Without fear or favor. I would now like to invite to the podium bill sweeney. Thank you, geoff. Good afternoon, everybody. U. S. Representative Christopher Collins sat on innates Board Of Directors for a period of more than three years. Spanning the runup to the Drug Trial Announcement in mid2017. Collins himself was the companys largest shareholder. In or about the summer of 2017, a drug designed to treat a debilitating form of Multiple Sclerosis had entered the late stages of a phase 2b Clinical Trial. This drug, mis416, was the only viable drug in the pipeline for innate. This is significant in that the companys value was nearly completely wrapped up in the success of the Clinical Trial and subsequent phase three trial. On the evening of june 22nd, 2017, collins received an email informing him that mis416 had failed its Clinical Trial. Electronic records indicate his initial shock at having received the news. The drug once anticipated to hold billions of dollar in value would now be the cause of significant financial loss for innate and, of course, its investors, many of whom shared a personal relationship with Congressman Collins. While the congressman was legally bound to keep his information confidential until the Trial Results were released to the investing public four days later on june 26th, we allege he did not. The indictment charges that collins immediately began contacting the family and friends he had brought into the fold. This set off a Ripple Effect in which many investors directly or indirectly connected to Congressman Collins were notified. Most of them quickly sold their shares. Innates stock price plummeted 92 on the first trading day following the public announcement. But collins conspirators had saved themselves over 750,000
in losses. Collins himself, having been prohibited from selling his shares for various reasons, did not avoid a financial loss. Despite this fact, his alleged actions bought him facetoface with federal agents who had become aware of the crime that had been committed. When questioned by Law Enforcement about the alleged dealings, Congressman Collins, his son cameron, camerons fiances father steven czarsky, lied, plain and simple. Today they are charged with Insider Trading and lying to federal Law Enforcement agents. While collins may have thought giving his family and friends a headsup about material nonpublic information would benefit them in the long run, heres a better inside tip for those who think they can play by a different set of rules. Access to this kind of information carries with it significant responsibility. Especially for those in society who hold a position of trust. Act honorably and in accordance
with the law and do not lie to Special Agents of the fbi. Many thanks to our partners, especially geoff and your team of Career Prosecutors. Your work has been exceptional. To the s. E. C. , i personally want to thank stephanie and steve for your work. Your team has been outstanding. To john who leads the White Collar Branch and to your investigators, i want to extend my personal appreciation. Some are standing in the back in the shadows but to nick, john, yolena and tracy, your work has been exceptional. What you do in the Community Matters and makes a difference. Thank you. Listening to william sweeney, the assistant director in charge of the new york field office. Thats geoffrey berman, the u. S. Attorney in the Southern District of new york outlaying in riffeting detail Insider Trading charges against a sitting member of the United States congress. Paul our legal analyst is with us. The congressman says he is innocent. He says this did not happen. When you watch geoffrey berman
go through those charts and the tick tock of the timing and to hear the fbi agent in charge talk about the electronic records they have, what does that tell you about this case . Well, that presentation, i think, demonstrated a very clearcut case against the congressman and members of his family and also the czarsky family. These cases sometimes are dry and difficult to understand because of their complexity, but those charts demonstrated how a classic insider trade iing case works. One, you have the congressman on the Board Of Directors of the company innate. He gets Inside Information. And he has an obligation, they call it a fiduciary obligation, not to reveal confidential information. It may affect the stock price or welfare of the company. Instead he transmits that information to his son who say heavy stockholder in the company and he transfers it to his fatheriflaw and other family
members and we have a trading fest going on during which they save 750,000 in potential losses because of the Insider Information. The poor members of the public who find out about it the next day