(CNN)New York Rep. Chris Collins surged into the national consciousness on Wednesday, when he was indicted on charges of insider trading in relation to a company named Innate Immunotherapeutics Limited, a company in which he is the largest shareholder and, until relatively recently, served on its board.
Cameron Collins then used the insider information "to make timely trades in Innate stock and tip others", the indictment alleges. Collins' son, Cameron, and Stephen Zarsky, the father of Cameron Collins' fiancée, are also facing charges.
The congressman allegedly tipped his son off to the trial results before they became public, which he then passed to others including Zarsky and Zarsky's wife, allowing them to avoid more than $US768,000 ($1.03 million) in losses. Collins reportedly surrendered to the Federal Bureau of Investigation. He and his co-defendants all pleaded not guilty at an arraignment Wednesday afternoon. They were released on $500,000 bond, and are set to return to court in October. Chris Collins was also ordered to surrender his diplomatic passport.
Chris Collins' attorneys Jonathan New and Jonathan Barr say their client is innocent, saying they will "mount a vigorous defense to clear his good name". "Congressman Collins will have more to say on this issue later today".
Innate had been developing a drug to treat multiple sclerosis, but in June 2017 the drug's clinical trial was declared a failure.
A successful drug trial was needed before the drug could be sold commercially.
His stock ultimately declined by millions of dollars in value when the share price plummeted by 92 percent one day after the trial results were released, federal prosecutors said.
The felony charges lodged Wednesday against Rep. Chris Collins, R-Clarence, sound complicated - securities fraud, wire fraud and conspiracy, among others.
Collins represents New York's solidly Republican 27th Congressional District, and nonpartisan analysts predict he will win re-election.
In a letter to his supporters Wednesday, Collins vowed to fight the charges and said he will stay in the race. The district includes areas surrounding Buffalo and Rochester.
GOP reaction was muted, but several Democrats are speaking out against Collins. Until this matter is settled, Rep. Collins will not be serving on the House Energy and Commerce Committee.
This is not the first time the congressman's involvement with Innate has attracted scrutiny.
Collins sat on the board of Innate Immunotherapeutics Limited, an Australian biotech company that had been working on a drug meant to treat Secondary Progressive Multiple Sclerosis. But it but found there wasn't enough evidence to warrant a congressional probe.
Collins was attending a congressional picnic at the White House when he got the email.
At 7:11, one minute after sending that email, Collins tried to call his son Cameron, who was also an investor in Innate. He was also already under investigation by the Congressional Ethics Office.
This scandal drives home that MOCs sit in unique positions of power to manipulate the market for personal gain - be it insider trading or promoting policies that affect their own fortunes.
Before the drug trial results were released publicly on June 26, Cameron Collins made more that 50 trades in Innate stock and sold almost 1.4 millions shares, the documents state.
On June 26 at the close of the market, Innate announced that the drug trial had failed.