US congressman resigns amid insider trading scandal involving Australian biotech company

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.

Read more: http://www.theguardian.com/us

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