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.
After doggedly fighting and winning re-election at last November's mid-term elections, Chris Collins abruptly resigned from Congress on Monday and is expected to plead guilty on Tuesday in a Manhattan courtroom.
Mr Collins, a staunch supporter of US President Donald Trump, sat on the Australian Stock Exchange listed Innate's board and held a 16.8 per cent stake in the company in June 2017, when he allegedly participated in a scheme to commit insider trading.
Prosecutors allege Mr Collins, 69, was at a picnic at the White House on June 22 last year when Innate's chief executive sent him a highly-confidential email confirming the company's key multiple sclerosis drug had failed a critical trial.
Chris Collins has resigned from Congress. Source: EPA
Mr Collins was obligated 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 per cent.
Prosecutors allege the trades allowed Cameron Collins, Mr Zarsky and others to avoid over $1.13 million in losses.
Cameron Collins and Mr Zarsky are also scheduled to plead guilty in Manhattan on Thursday.
Mr 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 Mr Collins' high-profile links to Innate "virtually precluded" him from selling the stock.
