An insider trading scandal involving a little-known Australian biotech company continues to rock US politics with the resignation of high-profile New York Republican congressman.and winning re-election at last November's mid-term elections, Chris Collins abruptly resigned from Congress on Monday and is expected to plead guilty on Tuesday in a Manhattan courtroom.
Mr Collins, a staunch supporter of US President Donald Trump, sat on the Australian Stock Exchange listed Innate's board and held a 16.8 per cent stake in the company in June 2017, when he allegedly participated in a scheme to commit insider trading.
Mr Collins was obligated to keep the trial results secret until Innate publicly released them, but he allegedly tipped off his son Cameron Collins who was also a substantial shareholder. Cameron Collins allegedly tipped off his father-in-law Stephen Zarsky and others who sold shares before the information went public and the stock value crashed 92 per cent.Prosecutors allege the trades allowed Cameron Collins, Mr Zarsky and others to avoid over $1.13 million in losses.Mr Collins, who was already facing a congressional ethics probe for his involvement with Innate when the bad trial news came through, did not trade his own Innate stock.
Prosecutors said Mr Collins' high-profile links to Innate"virtually precluded" him from selling the stock.