Rep. Chris Collins (R-NY) (Photo by Spencer Platt/Getty Images)
Rep. Christopher Collins got a bit of good news this week as prosecutors from the Southern District of New York dropped some of the insider trading charges against him in a Superseding Indictment. But, if you read the fine print, it’s only a very little bit of good news.
The New York Congressman is still facing five securities fraud charges from June 22, 2017, when he raced out of the Congressional Picnic at the White House to dial his son from the lawn seven times in five minutes. When Cameron Collins finally picked up, his father frantically ordered him to dump stock in their favorite Australian biotech company Innate Immunotherapeutics based on non-public information. And Cameron Collins is still charged with six counts of blabbing to everyone he could get hold of, including his wife and father-in-law Stephen Zarsky, that the drug they’d hyped as a cure for multiple sclerosis and possibly HIV had just failed the clinical trial, so they needed to get the hell out before the news broke.
The Congressman himself had invested $6 million, none of which he could sell because his shares were held in Australia, where trading had already been halted. But Cameron Collins and his merry band of tippees saved themselves upwards of $760,00 in losses as the stock plunged 92 percent between June 26 and June 27.
The good news for the Collins crew, including Zarsky who is also charged, is that the government decided it wasn’t worth the time to fight about the Speech or Debate Clause, so they dropped reference to the Office of Congressional Ethics 2017 finding that there was “substantial reason to believe that Representative Collins shared material nonpublic information in the purchase of Innate stock, in violation of House rules, standards of conduct, and federal law.”
(During that investigation, Collins encouraged witnesses, including former Rep. Tom Price whom he’d convinced to invest in Innate, not to cooperate because the OCE lacked subpoena authority. He also insisted that the hadn’t destroyed evidence, he just likes to Marie Kondo his inbox on the regular — “I delete my emails every day. In fact, generally three times a day. I delete all our texts, three times a day. I just always — I have a very uncluttered life and something like this would be absolutely no reason for me to hang onto it.”)
And because Collins could have delayed the trial by appealing the admissibility of the very carefully worded statement by his chief of staff denying the charges based on a (perhaps spurious) argument about the Speech or Debate Clause, the government went ahead and convened a brand new grand jury and reindicted him and his family without it.
As U.S. Attorney Geoffrey Berman said in a letter to Judge Vernon S. Broderick:
It should be emphasized that in making these modifications to the Original Indictment, the Government does not intend to restrict in any way the evidence that it may rely upon at trial. Subject to the Court’s rulings on admissibility, the Government reserves the right to offer any and all evidence that it deems relevant to the charges in the S1 Indictment, including evidence to which Congressman Collins (or any other defendant) has objected on Speech or Debate grounds or otherwise.
And if Congressman Collins wants to appeal the admissibility of that evidence post-trial, he can go ahead and knock himself out.
The government also narrowed the scope of charges relating to Stephen Zarsky, who called three more people on June 23 and told them to dump their Innate stock STAT, since Chris and Cameron Collins couldn’t be held entirely responsible for their in-law’s big, fat mouth.
So, it’s a win for Collins. But not much of one.
Superseding Indictment [USA v. Collins, et al., No. 1:18-cr-00567-1 (S.D.N.Y. Aug 6, 2019)]
Berman Letter [USA v. Collins, et al., No. 1:18-cr-00567-1 (S.D.N.Y. Aug 6, 2019)]
Feds Narrow Insider Trading Case Against Chris Collins to Sidestep Legal Hurdles [Buffalo News]
Elizabeth Dye lives in Baltimore where she writes about law and politics.