Thursday, August 9, 2018

The Best People

Rep. Chris Collins (R-NY), the first member of Congress to endorse Trump for president, is under arrest for insider trading.

Here’s what’s laid out in complaints from the Securities and Exchange Commission and the US Attorney for the Southern District of New York (Collins has pleaded not guilty):

Collins sits on the board of Innate Immunotherapeutics, an Australian biopharmaceutical company in which he is also the largest shareholder.

On June 22, 2017, Collins learned that Innate’s main drug had failed clinical trials, a grave outcome for Innate’s financial condition.

Literally seconds after learning this news, Collins contacted his son, Cameron, who at the time owned 2% of Innate.

Over the following four days, Cameron Collins and several other associates of the Collinses proceeded to liquidate their positions in Innate before the public announcement of the drug failure on June 26, after which the stock fell 92%. They saved approximately $750,000 by selling before the announcement.

Innate is not an especially large company. As a result, per the SEC: “The sales by Cameron Collins, his girlfriend, and her parents, including Stephen Zarsky, made up more than 53% of the stock’s trading volume [on June 23] and exceeded Innate’s 15-day average trading volume by more than 1,454%.”

Erik Loomis at LGM wonders why Collins wasn’t appointed to Trump’s cabinet.

Maybe because his grifting was small potatoes compared to Commerce Secretary Wilbur Ross.

It is difficult to imagine the possibility that a man like Ross, who Forbes estimates is worth some $700 million, might steal a few million from one of his business partners. Unless you have heard enough stories about Ross. Two former WL Ross colleagues remember the commerce secretary taking handfuls of Sweet’N Low packets from a nearby restaurant, so he didn’t have to go out and buy some for himself. One says workers at his house in the Hamptons used to call the office, claiming Ross had not paid them for their work. Another two people said Ross once pledged $1 million to a charity, then never paid. A commerce official called the tales “petty nonsense,” and added that Ross does not put sweetener in his coffee.

There are bigger allegations. Over several months, in speaking with 21 people who know Ross, Forbes uncovered a pattern: Many of those who worked directly with him claim that Ross wrongly siphoned or outright stole a few million here and a few million there, huge amounts for most but not necessarily for the commerce secretary. At least if you consider them individually. But all told, these allegations—which sparked lawsuits, reimbursements and an SEC fine—come to more than $120 million. If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.

That’s how you get to be in the Cabinet.

2 barks and woofs on “The Best People

  1. There is one point that all the pundits have missed about Congressman Collins. When an individual decides to sell a stock through a stock exchange the monies received don’t just appear out of thin air; there is someone who is buying the stock. So Mr. Collins’ son essentially transferred a $700,000 loss to an unsuspecting investor(s). Is this kind of ethics the way that the congressman amassed his net worth of $65 million?

    • No – it likely went like this; the buyer is a friendly “hedge” fund who wants the tax loss and can afford it and who now is owed a big favour by the Congreedsman. Too bad he screwed it up by making that tipper call from the White House because he can’t pay the debt now.

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