tv Rep. Chris Collins Indictment News Conference CSPAN August 9, 2018 6:24am-6:52am EDT
university of illinois law professor talks about rising bankruptcy rates among seniors. and the national skills commission on the shortage of skilled workers and the efforts to improve skills development programs. "washingtonatch journal" live at 7:00 eastern this morning. join the discussion. morning, three federal agencies announced insider trading charges against congressman chris collins. that announcement was made at a press conference in new york city. >> good afternoon. i am the u.s. attorney for the southern district of new york. today we announce criminal charges against her stiffer collins, a united -- against
christopher collins, a united states congressman. he is charged with insider trading and lying to the fbi. collins cheated our markets and our justice system in two ways. first, he tipped his son to confidential corporate information at the expense of regular investors, and then he lied about it to law enforcement to cover it up. son, cameronis his collins, and the father of cameron's fiancee. these charges are a reminder that this is a nation of laws and that everybody stands equal before the bar of justice.
now i would like to go into the details of the allegations more. to serving in the house of representatives, congressman collins was also on of aoard of directors publicly traded company that was developing a drug for multiple sclerosis. in june of 2017, congressman collins was told confidential and highly sensitive information. information that was not yet made public. namely, that the company's main drug to be the backbone of its company was a total failure. this was devastating information for the company. congressman collins had an obligation and a legal duty to keep that information secret
until that information was released by the company to the public. he did not keep it secret. instead, as alleged, he decided to commit a crime. he placed his family and friends above the public good. congressman collins was a major investor in the company and so was his son. the congressman knew he cannot sell his own shares for personal and technical reasons, including that he was already under an investigation regarding the company by the congressional ethics office. the crime he committed was to andhis son so that cameron a few select others could trade on the news while the investing public remained in the dark. as the indictment alleges, that
is exactly what they did. sold, cameron's fiance sold, the father of the fiance sold. his wife sold. other friends and relatives sold. collinsuse congressman violated his duty to keep the information secret. when the news of the drugs failure became public, the stock plummeted. conspirators used the inside information to avoid over $750,000 in losses. congressman collins cannot keep his crime a secret forever. the fbi asked to interview him and instead of telling the truth, he lied. .o did cameron collins by lying to the fbi, they
compounded their insider trading crime with the crime of criminal cover-up. now i would like to go to these ,harges, which -- these charts which summarize the allegations in the indictment. this first chart is a tipping chain. it demonstrates the flow of the illegal insider information and the training from that information. at the top is congressman collins. he had an obligation as a board member when he received confidential information to keep that information secret until the company announced it in public.
>> in total disregard of that tipped the collins inside information to his son so could sell. cameron collins, when he received that illegal inside information, he did two things, both of which are illegal. he sold stocks based on that inside information, and avoided $570,000 in losses. he also took that inside a legal information and tipped others, including his fiancee, is beyonce's wife -- his fiancee's wife, his fiancee's father, and he tipped a friend, all of who traded on the illegal inside
information. his fiancee's father avoided $1 losses by treading on that information, and he tipped his brother, his sister, and he tipped a friend, two of whom traded on the information, one attempted to trade on the information, but was unable. in total, the conspirators 68,000, losses of over $7 initialuse of the illegal insider information tips by congressman collins. with this chart we set some of the key allegations in the indictment against a timeline, a backdrop of the innate shareprice. 22, 2017,ning of june
congressman collins was at a congressional picnic, and at 6:55 he received an email from the ceo of innate informing him of the horrendous news that the drug had failed trial. at seven: 10:00 p.m., p.m.essman -- at 7:10 congressman collins responded to that email. at least at seven: 10:00 p.m. p.m.essman -- 7:10 congressman collins knew the information. there were six unsuccessful calls and on the seventh call, as alleged in the indictment, congress and collins tips -- congressman collins illegally
tips his son about the drug trial results so that his son, cameron, could trade on those results. on june 22,vening after cameron collins has this illegal insider trading information, cameron collins drives with his fiancee to his fiance's parents house. they arrived at the house at 9:17 p.m. less than 20 minutes later, at her4 p.m., the fiancee's mot is on the phone with her broker, beginning the process of selling her shares of innate. 23 atxt morning on june 7:42 a.m., cameron collins begins the process of selling his shares of innate.
through june 23 and june 26, cameron collins sells approximately 1.3 9 million million shares of innate. after the market closes, innate announces to the public that its drug had failed the trial. the next day, the drug price, the price of innate, falls off a cliff. a drop to 92% in value in a single day -- it drops 92% in value in a single day. this was the drop in value that the co-conspirators avoided by selling their shares before the public announcement. they could only sell those shares by virtue of the initial tip of inside information by
congressman collins. a case of this type of significance obviously involves and theirnd fbi, representatives are standing up your with me today. to my left is my good friend william sweeney, the assistant director in charge of the fbi's europe field office. to the far left is the special agent in charge of the fbi new york office criminal division. the fbi's work on this case was spectacular, and i want to thank them for their professionalism and dedication. we work with the fbi on so many important cases, and it is always privilege. is stephanief bill and steve, who are codirectors
of the sec's division of enforcement. i want to thank them and the sec for their hard work on this matter. last, i want to acknowledge and thank the career prosecutors in my office handling the case. to my right is max nicholas, damien williams, bob allen, scott hartman, and the cochise -- co-chiefs of our securities and commodities fraud task force. who bysman collins, virtue of his office helps to write the laws of our nation, acted as if the law did not apply to him. the charges today demonstrate once again that no matter what the crime, and no matter who committed it, we stand committed
in the pursuit of justice without fear or favor. i would now like to invite to sweeney.m bill bill: thank you, and good afternoon, everybody. u.s. representative christopher collins sat on innate's board of directors for more than three years. collins himself was the company's largest shareholder. 2017,around the summer of a drug designed to treat a debilitating form of multiple sclerosis had entered the late stages of a clinical trial. this drug was the only viable drug in the pipeline for innate. this is significant in that the company's value was nearly completely wrapped up in the
success of the clinical trial and a subsequent phase three trial. 2017, evening of june 22, collins received an email informing him that the drug has failed its clinical trial. electronic records indicate his initial shock at having received the news. the drug, once anticipated to hold billions of dollars in value, would now be the cause of significant financial loss for innate, and of course its investors, many of whom shared a personal relationship with congressman collins. while the congressman was legally bound to keep this information confidential, we allege he did not. the indictment charges that collins immediately began contacting the family and friends he brought into the fault. a ripple effect.
most were notified quickly sold their shares and innate's stock price plummeted 92% on the first trading day following the public announcement. collins conspirators have saved themselves over $750,000 in losses. collins himself, having been prohibited from selling ishares, did not avoid -- from selling his shares, did not avoid financial loss. when questioned by law enforcement about the alleged dealings, congressman collins, -- his, his fiancee's son's fiancee's father, lied, when in simple -- plain and simple. today they are charged with insider trading and lying to federal enforcement agents. better insight tip for
those who think they can play by a different several's. access to this kind of information carries with it a significant responsibility, especially for those in society who hold trust. do not like to special agents of the fbi. many thanks always to our partners, especially geoffrey eam of and your to career prosecutors. to john and those who lead a white-collar branch, i want to extend my personal appreciation. some are standing back in the shadows, but your work has been exceptional. what you do in the community matters and makes a difference. thank you. >> i would like to invite to the podium stephanie, the codirector of enforcement at the
sec. stephanie: good afternoon. as he said, i am codirector of the sec's division of enforcement. before i begin my remarks, i would like to thank u.s. attorney geoffrey berman and his prosecutors, as well as the fbi, who worked on this matter. filed securities fraud charges against congressman christopher collins, his son, candace smith -- cameron collins, and three others. thats complaint allege christopher collins learned of the negative news incapacity -- -- of innate.s
in addition to cameron collins is selling his own innate shares, he is alleged to have tipped his girlfriend, her mother, and her father. thatec further alleges after trading in his own account, cameron collins' fiancee's father tipped others. this bars christopher collins from serving as a director of a public company. being the director of a public company comes with responsibilities and is a privilege. christopher collins is accused of breaching his responsibilities. the defendants, on the sec alleges each avoided losses by selling all of their innate
shares in advance of the company's negative announcement, have each agreed to settle the charges against them by consenting to injunctions, giving up their own guy gains -- ill-gotten gains. accountants who engage in illegal insider trading should not serve in the role of gatekeeper in our securities markets. the settlements are subject to court approval. now let me turn things over to the codirector of the enforcement division for some additional remarks. >> thank you, stephanie. first off, i would like to commend the excellent work of staff members who handled this investigation and who will handle the litigation going forward. the sec's insider trading enforcement program is a great
success. we have successfully detected and pursued insider trading schemes of all shapes and sizes, from massive international schemes to trade on information stolen through cyber intrusions, to those perpetrated by a single faithless insider. in the past five years alone, angst to the staff's hard work, it's ever developing expertise, and its use of highly effective proprietary analytical tools, the sec has filed more than 2 insider trading cases50 against more than -- 250 insider trading cases. action, ast of this described in our complaint, is the tipping chain that extends from christopher collins to his son, cameron collins, two members of cameron collins' fiance's family, and beyond.
we uncovered suspicious trading by cameron collins and did not stop there. identifiedd, they well-timed trades by people close to him, including his girlfriend, her mother, her father, and her father's relative and friend. in addition to finding the trading at the core of this action, the staff who worked on this matter worked alongside the talented prosecutors in the southern district of new york, and the dedicated men and women of the fbi. they have developed a compelling and throat of the dead shia record -- thoreau evidentiary thorough evidentiary record. it reflects frantic efforts by tippers to convey inside information and traders to sell their innate shares before the company's negative news announcement. as alleged in our complaints,
the defendants and their tipees accounted for almost half of innate entire trading volume on the first trading day after they got the news. cameron collins himself accounted for more than half of the innate shares sold on trading day. insider trading is illegal and corrosive. for our capital markets to retain their place as the envy and itsorld, the sec law enforcement colleagues must be vigilant in policing against this misconduct. those who would engage in this sort of behavior should know that we will continue to devote our resources, expertise, and energy to finding them and seeking to hold them accountable. thank you. >> we will take your questions. >> was there a wiretap involved
here? [indiscernible] a there is no allegations of wiretap in this case. with respect to the details and the evidence that are not contained in the indictment, doj policy restricts me so i will not get into proof of trial. >> [indiscernible] are there any other members of congress under investigation? >> that is not an aspect of this indictment. i have no comment. >> [indiscernible] >> the indictment alleges that ,n the evening of june 22, 2017
when congressman collins received the information via an email from the ceo of innate, that he was at the congressional picnic, and in that -- and that it was from that picnic the event try to reach his son. six attempts in five minutes, and then on the seventh attempt he got through to his son, and he is alleged in the indictment, he illegally relayed the results of that drug test so that his son could trade on the information. that was all done as alleged in the indictment, at the congressional picnic. >> [indiscernible] the indictment does not ,pecify the phone that he used and i don't think i am allowed under doj policy to go outside the four corners of the indictment -- full corners of
the indictment. >> [indiscernible] >> i have no comment on that. >> i just want to get a better understanding of how [indiscernible] i am not going to get into how this matter was referred to our office. >> the statement said he did not make any trades. -- hisplaint is that he son acted on the tips. how do you go about proving that it is sufficient knowing -- you need to prove knowing [indiscernible] >> yes, the indictment alleges that the congressman conveyed the illegal inside information, anticipating that his son was going to trade on the information, and i can't get into the evidence of trial right now. i can't go beyond the four
corners of the indictment. >> we are about three months away from a congressional election. does your office have any concerns about the indictments willand that potentially the political -- that they will be political? >> politics does not work into our decision-making on charging a case. we brought the case when the case was ready to be brought. that being said, we are cognizant of the prudential concerns surrounding election, but here we are months away from the election. those concerns do not apply. >> [indiscernible] know, indictment -- you it's premature to discuss those matters. >> are there any other people who are under investigation? [indiscernible] i have no comment on that.
>> how come the sec chose to name the fiance's parents? investigation its , it is a civil investigation we are -- they are conducting. we are conducting a criminal investigation with a different standard of proof, so i'm not going into the various factors that go into our decision on whether to charge or not charge someone, but they are different investigations. yes? [indiscernible] >> we have not. >> thank you. >> thank you. >> eight hours later, the congressman held a press