Congressman arrested for insider trading
- 4 million Number of Innate Immuno shares owned by Rep. Chris Collins.
- 390 Number of days it took for the U.S. House Committee on Ethics to act after Collins’ case was referred by the Office of Congressional Ethics.
- 11,709 Number of signatures on Public Citizen petition that demanded an investigation.
During their time in Congress, U.S. Reps. Chris Collins (R-N.Y.) and Tom Price (R-Ga.) bought stocks in the pharmaceutical and health care industry.
In August 2016, Collins, who sat on the board of Innate Immuno, purchased 4 million shares of the company, a 17% stake in the company. That same month, Price purchased between $50,000 and $100,000 in stocks of the same company. The stock value of Innate Immuno doubled in four months after Price and Collins invested in the company. During that period, both lawmakers sponsored several legislative measures, including the 21st Century Cures Act, which the Wall Street Journal reported could benefit Innate Immuno as it would “authorizes spending $6.3 billion for medical research, including $500 million for the FDA to speed up drug approvals.”
Public Citizen filed a complaint on Jan. 5, 2017, with the Office of Congressional Ethics (OCE) and the U.S. Securities and Exchange Commission (SEC), calling for an investigation of Price and Collins for possible violations of insider trading and conflicts of interest laws and regulations. The OCE conducted an extensive review that found probable cause for investigation. On July 14, 2017, it recommended that the U.S House Committee on Ethics pursue a formal investigation.
On Aug. 28, the House Committee on Ethics decided to extend the preliminary review to determine whether there was sufficient evidence for an investigation. On Feb. 22, 2018, Public Citizen sent a follow-up letter and petition signed by 11,709 people demanding a formal investigation. In the letter, Public Citizen raised concerns that the House Committee on Ethics was failing to fulfill its duty to the public and once again urged for members of Congress to be held accountable.
In the summer of 2018, Collins was indicted by the U.S. Department of Justice (DOJ) on charges of insider trading. He resumed his re-election campaign in September and was narrowly re-elected to Congress in November. An investigation against Tom Price was underway until March 2017, when Preet Bharara, the U.S. attorney overseeing the investigation, was fired from his position.
While the House Ethics Committee sits idle, it is refreshing to see that the Department of Justice is stepping up and taking violations of insider trading laws by members of Congress seriously.Craig Holman, government affairs lobbyist for Public Citizen’s Congress Watch division