While at a White House picnic on June 17th of 2017, Chris Collins, a member of the U.S. House of Representatives from 2013-2019, received an email from the chief executive of Innate Immunotherapeutics. This company, a New Zealand-based bio-tech firm, counted Mr. Collins as both the chair of its board of directors as well as its primary investor. The email said that an experimental multiple sclerosis drug in development by Innate had failed its clinical trial. Innate’s shares would soon drop by over 90 percent.
What happened next is history. Hearing the news, Mr Collins, the first member of Congress to publicly support Donald Trump for president, sold his shares in the company and told his family members to do the same. Mr. Collins was sentenced to twenty-six months in prison for insider trading and lying to the FBI, less than half of the maximum sentence possible. His son, Cameron Collins, also received a felony conviction while other friends and family members have yet to be sentenced.
What’s interesting about this is not so much that it happened. What’s interesting is that Mr. Collins apparently thought he could get away with it. Given how blatantly Collins tried to play the system, he must have operated under the assumption that he could get away with it. In this case he didn’t, but more damning still is the implication that he was operating in an environment where he assumed that he would.