Staunch Trump supporter Chris Collins resigned on Monday after fighting accusations of insider trading for more than two years
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 Chris Collins.
After fighting accusations involving Innate Immunotherapeutics for more than two years and winning re-election at last Novembers midterm elections, Collins abruptly resigned from Congress on Monday and is expected to plead guilty on Tuesday in a Manhattan courtroom.
Collins, who was the first member of Congress to endorse Trump during the 2016 campaign, sat on the Australian Stock Exchange-listed Innates board and held a 16.8% stake in the company in June 2017 when he allegedly participated in a scheme to commit insider trading.
Prosecutors allege Collins, 69, was at a picnic at the White House on 22 June last year when Innates chief executive sent a highly confidential email to Collins confirming the companys key multiple sclerosis drug had failed a critical trial.
Collins was obliged 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%.
Prosecutors alleged the trades allowed Cameron Collins, Zarsky and others to avoid more than US$768,000 ($1.13m) in losses.
Cameron Collins and Zarsky are scheduled to plead guilty in Manhattan on Thursday.
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 his high-profile links to Innate virtually precluded him from selling the stock.
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