On August 8th, the Securities and Exchange Commission charged Congressman Christopher Collins with insider trading based upon telephone calls he made from an outdoor White House event. The same day, an Indictment based upon the same facts was unsealed. While no one can recall a sitting congressman being charged with insider trading, Congress did specifically target misuse of confidential information by such federal government employees in 2012. The SEC chose not to avail its civil action of the advantages levied by that legislation, relying instead on common law theories and anti-fraud catchalls. Accordingly, the pending case is a primer on the ironic limitations of federal statutes and regulations aimed at eradicating informational advantages obtained unlawfully.
The ‘Collins’ Allegations
In June 2017, Collins served on the Board of Innate Immunotherapeutics, Ltd. (“Innate”), a company listed on the Australian Stock Exchange (“ASE”). Collins owned over 16% of the outstanding shares of Innate stock, a position that had triggered a House ethics investigation. Collins’ son and daughter also owned Innate shares.
