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Update: US Rep. Chris Collins faces securities charges

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Update: US Rep. Chris Collins faces securities charges

New York Republican Rep. Chris Collins is faces insider trading and other charges after investigators concluded Collins tipped his son off to negative results from a pharmaceutical trial, encouraging his family and friends to sell shares.

Collins was investigated by the House Ethics Committee during the fall of 2017 over his dealings with Australia-based Innate Immunotherapeutics Ltd. An independent watchdog concluded that Collins had violated federal law and House rules by using his congressional position to benefit the company while using inside information to inform transactions. Politico reported at the time that Collins had pushed a company drug to National Institutes of Health officials.

The Securities and Exchange Commission said in a statement that Collins "learned of the negative clinical trial results on the evening of June 22, 2017 in an email from Innate's CEO to the board of directors, which stated that the CEO had 'extremely bad news' indicating that drug trial results 'pretty clearly indicate "clinical failure".'"

Cameron Collins, the congressman's son, allegedly sold nearly 1.4 million shares of Innate stock before the company announced the results of the trial.

Geoffrey Berman, the U.S. Attorney for the Southern District of New York, said at a news conference that the congressman and his associates compounded their illegal activities by lying to the FBI.

"The crime that [Chris Collins] committed was to tip his son Cameron," Berman said, "while the investing public remained in the dark."

"By lying to the FBI, they compounded their insider trading crime with the crime of criminal cover-up," he added.

House Speaker Paul Ryan stripped Collins of his membership on the House Energy and Commerce Committee following news of the charges, and said in a statement that the allegations against Collins "demand a prompt and thorough investigation by the House Ethics Committee."

In statement to The New York Times, Collins' lawyers said he intends to fight the charges. "It is notable that even the government does not allege that Congressman Collins traded a single share" of the company’s stock, the Times quoted the attorneys as saying.

Tom Price, President Donald Trump's first secretary of Health and Human Services, also faced questions about stock trades, allegedly involving Innate Immunotherapeutics.

Collins represents New York's 27th Congressional District, which includes suburbs of Buffalo and Rochester. He won re-election in 2016 with 67% of the vote.