In a high-profile enforcement action, the Securities and Exchange Commission charged Congressman Christopher Collins, his son and his son’s girlfriend’s father with illegal insider trading. In a coordinated move, the U.S. Attorney’s Office for the Southern District of New York filed parallel criminal charges against all three arising out of the same underlying illicit securities trading.
In both the SEC complaint and the criminal indictment, Christopher Collins, who served as an independent director of Innate Immunotherapeutics Ltd., an Australian biotechnology company, was charged with providing his son non-public, material information about negative clinical trial results for Innate’s multiple sclerosis drug immediately after learning of the confidential data. In turn, his son and son’s girlfriend’s father were charged with illegal insider trading and the tipping of others. Separately in the criminal case, all three individuals were charged with making false statements to FBI agents after-the-fact when interviewed about the circumstances of the suspicious trading.
In an extremely detailed blueprint of the relevant timeline, the SEC complaint contends that Christopher Collins learned of the adverse drug trial results on the night of June 22, 2017 via an email from Innate’s CEO, which in no uncertain terms conveyed “extremely bad news” that the results were a failure. The SEC alleges shortly thereafter Christopher Collins called his son and informed him of the bearish news.
The SEC complaint further alleges that later that same evening, the son went to his girlfriend’s parents home and tipped her father of the soon-to-be released negative news. The next morning, before the market opened, they allegedly placed sell orders on the biotechnology shares which were filled after the market began trading. In the next two trading days, the son is alleged to have sold almost 1.4 million shares shortly before the public release of the failed clinical drug test. Upon the release of the negative results, the stock price cratered, falling more than 92%. As a benefit of their alleged insider trading, the son and his girlfriend’s father avoided losses in excess of $700,000. The SEC complaint also claims that the two tipped other friends and family who, in turn, sold their Innate stock prior to the release of the bad news.
Consistent with my quote in an article in The Buffalo News on this case, I believe the Government has an extremely strong and compelling insider trading case based upon the alleged time-line of events (receipt of inside information, subsequent communications and the dumping of shares), coupled with documentary evidence, including potentially incriminating text messages.
The ultimate fatal head shot for the defendants, however, may end up being their alleged false statements to the FBI when asked about the circumstances of the subject trading. If they lied to the FBI, that is sufficient grounds alone to go to jail, regardless of whether the Government proves the underling insider trading violation.
If you are being investigated for insider trading by the SEC or DOJ, it is imperative that you protect your legal rights by retaining an experienced SEC defense lawyer. David R. Chase formerly worked in the SEC’s Enforcement Division as a Senior Counsel and knows how the SEC investigates, prosecutes and resolves its cases. The Law Firm of David R. Chase, an SEC law firm located in South Florida, is headed by SEC defense lawyer, David Chase, who represents those under SEC investigations throughout the nation. Contact SEC defense lawyer Mr. Chase toll-free at: 800-760-0912 for a confidential and no cost initial consultation, or at firstname.lastname@example.org.