Chris Collins, a former N.Y. Republican congressman who pleaded guilty to insider trading and lying to the FBI, has been sentenced to 26 months in federal prison.
A federal district court in New York also fined Collins $200,000 on Jan. 17.
Former N.Y. Congressman Chris Collins
Prosecutors had sought up to 57 months in prison for Collins, but the judge in the case ordered two sentences of 26 months to be served concurrently — one for each of the counts the now-former lawmaker had pleaded guilty to on Oct. 1, 2019.
Collins was accused in August 2018 of tipping off his son Cameron to insider information about the failure of a study for a multiple sclerosis drug being developed by Innate Immunotherapeutics Ltd., which changed its name in 2018 to Amplia Therapeutics Ltd.
Stephen Zarsky, the father of the younger Collins' fiancée, was also part of the alleged scheme.
On June 22, 2017, Collins received an email that Immunotherapeutics' multiple sclerosis drug failed in a critical phase 2B clinical trial.
At that time, Collins was on Innate's board and was its largest shareholder. He was obligated to keep the trial results secret until Innate publicly released them.
Instead, in breach of those duties, the lawmaker tipped off Cameron, also a substantial Innate shareholder, who in turn informed others, including Zarsky and some of his family members and a friend, ahead of the company's public disclosure, according to prosecutors.
Collins made the calls to his son about the poor study results from the White House lawn, where he was attending the annual picnic for members of Congress. Collins was a key supporter of President Donald Trump.
In total, Collins' son and Zarsky and his family members avoided over $768,000 in losses that they would have otherwise incurred if they had sold their stock in Innate after the failed study results were made public, according to prosecutors.
Collins resigned from Congress on Sept. 30, 2019. The next day, he pleaded guilty to one count of conspiracy to commit securities fraud and another count of lying to the FBI.
Collins' son and Zarsky are expected to be sentenced next week.