Mother, Daughter Finalize SEC Settlements in Rep. Collins Insider Trading Case
Lauren and Dorothy Zarsky were charged with using non-public insider information provided second-hand from Rep. Collins to dump shares in a drug company he was a board member of.
August 16, 2018 at 04:07 PM
3 minute read
U.S. Rep. Chris Collins, center, leaves Manhattan federal court after his arrest and arraignment on Aug. 8..
Rep. Chris Collins' one-time future daughter-in-law and her mother have both finalized settlements over securities violation charges brought by the Securities and Exchange Commission, federal regulators announced Thursday.
Without admitting or denying any of the charges, Lauren and Dorothy Zarsky settled charges they sold shares in an Australian drug company after Collins alerted his son about the failure of a drug trial. Federal authorities allege that the congressman's son, Cameron Collins, then alerted his then-girlfriend, and eventual fiancee, and her family to the drug sale bust, according to authorities.
Stephen Zarsky, father to Lauren Zarsky and husband to Dorothy Zarsky, is a co-defendant of Chris Collins and his son in a separate SEC complaint. The three men also face criminal insider trading conspiracy and other related charges by the U.S. Attorney's Office for the Southern District of New York.
According to the SEC, the settlements involve the disgorgement of what regulators call ill-gotten gains from the stock sale, as well as civil penalties. Lauren Zarsky agreed to pay nearly $40,000, while her mother agreed to pay more than $46,000. Additionally, Lauren Zarsky, who is a certified public account, agreed to a five-year ban, regulators said.
Lauren Zarsky is represented by Richards Kibbe & Orbe partner David Massey. He did not respond to a request for comment.
Dorothy Zarsky's legal team is led by Duane Morris partner Mauro M. Wolfe, who declined to comment.
Both the civil and criminal cases against the other defendants in the scheme remain ongoing. According to federal authorities, Chris Collins was alerted to the failure of a drug trial for a multiple sclerosis drug critical to the business plans of the biotech firm Innate Immunotherapeutics. Collins, who sat on the board of the drug company, is not alleged to have sold any of his holdings, but federal authorities say he disclosed non-public information to his son, who then spread the word.
Cameron Collins and Stephen Zarsky are alleged to have both sold off substantial holdings ahead of the public announcement of the drug trial results. Both shared the non-public information with others who made similar trades, federal authorities said.
Shortly after the charges were announced by U.S. Attorney Geoffrey Berman, Chris Collins announced he was suspending his re-election campaign for Congress. Attorneys for the congressman did not respond to a request for comment on the Zarskys' settlements.
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