Aust insider trading nabs US politician

US congressman Chris Collins was at a picnic on the manicured grounds of the White House in 2017 when an email from the chief executive of an Australian biotech company appeared on his phone.

Collins was a major shareholder and board member of Australian Stock Exchange-listed Innate Immunotherapeutics and had been eagerly awaiting news of clinical trials for a multiple sclerosis drug the company had developed.

A positive result would mean Innate's shares would skyrocket in value.

"I have bad news to report," the chief executive's email began.

The drug suffered a "clinical failure".

"Wow," Collins wrote back to the CEO.

"Makes no sense.

"How are these results even possible???"

Collins' decision to call his son Cameron just a few minutes later on that warm June 22, 2017 evening at the White House and disclose the bad news could send him to federal prison for up to five years.

Collins entered guilty pleas in a Manhattan court on Tuesday to insider trading and lying to the FBI charges.

Collins, as an insider, was obligated to keep the drug trial results secret until Innate publicly released them.

"I regret my actions," Collins told Judge Vernon Broderick during Tuesday's hearing.

"This is something I will live with for the rest of my life."

Collins resigned from Congress on Monday ahead of his court appearance.

Cameron Collins, who was also a major Innate shareholder, is due in court on Thursday and is also expected to plead guilty to similar charges.

Cameron Collins' father-in-law, Stephen Zarsky, was also charged.

Prosecutors allege Cameron Collins, the day after hearing the trial news from his father and before it was made public, sold approximately 1.391 million Innate shares.

The sales allowed Cameron Collins to avoid approximately $US570,900 ($A845,300) in losses, prosecutors said.

Cameron Collins allegedly disclosed the drug trial news to Zarsky, Zarsky's wife and a friend.

They collectively sold shares and avoided approximately $US186,620 in losses, prosecutors said.

Before Collins' demise he was a powerful member of Congress and one of the first senior Republicans to publicly support Donald Trump before his presidential election win.

Collins, 69, who represented a district in Buffalo, New York, did not offload his shares despite receiving the sensitive information.

He will be sentenced on January 17.

Austrlaian Associated PressBack to Breaking News

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