Indictment of Rep. Collins spurs House to ban members from serving on boards

WASHINGTON — A day after GOP Rep. Chris Collins was arrested on insider trading charges, two fellow New York lawmakers introduced a resolution that would prohibit members from serving on the boards of publicly traded companies.

“We must change the rules to prevent members from serving on corporate boards in order to improve the public’s trust in Congress,” Reps. Tom Reed (R) and Kathleen Rice (D) said in a joint statement on Thursday.

The lawmakers added: “There should never be a doubt in the public’s mind to lead them to think their Representative could be corrupted or incriminated because of their stake or position in a private company. We owe the American people this fair assurance.”

Senate rules prohibit members from serving on the boards of publicly traded companies.

On Wednesday federal prosecutors indicted Collins on charges that include securities fraud, conspiracy to commit securities fraud, wire fraud, conspiracy to commit wire fraud, and making false statements to investigators.

Collins has denied the charges.

Collins sat on the board of the Australian biotech company Innate Immunotherapeutics and was one of the company’s largest shareholders.

The indictment alleges that upon being informed of a failed non-public trial for a multiple sclerosis drug in June 2017, Collins notified his son, Cameron, so that Cameron could dump his Innate shares. The indictment alleges that Cameron then notified his fiancee’s father, Stephen Zarsky, so that Zarsky could dump his shares. The indictment names Zarksy and Cameron as defendants.

The Securities and Exchange Commission (SEC) filed a civil suit against Collins, his son, and Zarsky the same day the parties were indicted.

Zarsky’s wife, Dorothy, and his daughter, Lauren, settled insider trading charges with the SEC and have agreed to pay civil penalties.

Lauren Zarsky is a certified public accountant. Zarsky has agreed to a five-year suspension from appearing or practicing before the SEC as an accountant. Following the suspension period she is eligible to apply for reinstatement.

Collins has been removed from the House Energy and Commerce Committee pending resolution of the charges. The committee’s jurisdiction includes matters related to drug safety, public health and research.