The U.S. Attorney's Office in the Southern District of NY alleges that Collins passed along information about Innate Immunotherapeutics, an Australian biotech company at which Collins once sat on the board and owns almost 17 percent of stock.
Collins, one of the largest shareholders of Innate Immunotherapeutics and a board member of the biotech firm, faces charges of securities fraud. Cameron Collins, son of the 68-year-old legislator, was also arrested, along with Stephen Zarsky, whose daughter is engaged to the younger Collins.
Collins and top company executives expected the drug to pass clinical trials, which would significantly raise the value of the company's stock.
That allowed them, prosecutors allege, to avoid more than $768,000 in losses they would have incurred if they had traded the stock after the drug trial results became public.
Also charged is Collins's son, Cameron Collins, and the father of Cameron's fiancee, Stephen Zarsky.
Rep. Christopher Collins bought millions of dollars in stocks in an Australian drug company - and convinced five other GOP lawmakers to invest - all while pushing legislation aimed at helping the company succeed, according to a report.
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Collins, a three-term incumbent representing New York's 27th congressional district, is facing re-election this fall. Most recently, Collins called for an end to Special Counsel Robert Mueller's probe into campaign collusion and blaming the Obama Administration for failing to push back on Russian Federation.
"Despite the continued partisan attacks insinuating otherwise, Congressman Collins has followed all ethical guidelines related to his personal finances during his time in the House and will continue to do so", Michael McAdams told the Daily Beast.
U.S. Attorney for the Southern District of New York Geoffrey Berman said that this case was a reminder "that this is a nation of laws, and everyone stands equal before the bar of justice".
Chris Collins couldn't sell off his stock, according to prosecutors; He was already under a congressional ethics investigation and his stock was in the Australian markets, which had already halted trading of Innate stock.
While his guilt or innocence is a question for the courts to settle, the allegations against Rep. Collins demand a prompt and thorough investigation by the House Ethics Committee. "Insider trading is a clear violation of the public trust".
The representative, who denies the charges, is not accused of selling stocks himself.