BELLAVIA: Chris Collins Stock Guru: Under Fire For Stock Tips
In a world where I get political advice from The Financial Guys, Mike Lomas and Glenn Wiggle, it would only seem only fair that we get stock tips from Rep. Chris Collins. This week, HHS nominee Rep Tom Price (R-GA) was asked by Senator Patty Murray (D-WA) during his confirmation hearing:”Congressman Chris Collins, who sits on President-elect Trump’s transition team, is both an investor and a board member of [Innate Immunotherapeutics]. He was reportedly overheard just last week off the House floor bragging about how he had made people millionaires from a stock tip,” she said. “Congressman Price, in our meeting, you informed me you made purchases based on conversations with Rep. Collins, is that correct?”
So what is the big deal you ask? The Cures Act was a bill signed into law this past December 2016. The bill was originally sponsored by Fred Upton (R-MI). Chris Collins wrote three amendments to the bill. Two of which are alleged to have benefited companies like the one he invests in and sits on the Board of Directors:
- Section 3021, which encourages the broader application of innovative clinical trial designs, including the use of Bayesian statistics and adaptive trials, to enhance and accelerate effective clinical trials. These changes to the way the FDA approves clinical trial designs will help unleash new, groundbreaking therapies by allowing researchers to efficiently change their trials to meet the individual responses of their participants.
- Section 3071 will expedite and improve the drug approval process by increasing the number of senior biomedical researchers the FDA is allowed to hire and also making the salary of those individuals more competitive with private industry. This will help ensure that our best and brightest scientists will remain with the FDA to review and approve drug applications, and get cures to patients more quickly.
Which brings us to this current allegation.
Collins is overheard on a cellphone conversation bragging about how many “millionaires he has made in Buffalo” with this alleged stock tip in the last month.
This is key, because the law was signed in December and directly implies that money was made since President Obama signed the bill.
Now, let’s be honest, the People’s House is not the arena to be talking about stocks, girlfriends or real estate. You are there to do the job of the people. And this is at best unprofessional and at its worst in violation of the Stock Act, passed in 2012, which limits the trading that elected officials can profit from with regards to their position and insider information.
The company in question is an Australian based corporation called Innate Immunotherapeutics, which tests trial drugs for serious diseases such as MS. Collins is a board member, has held the stock for 15 years and two of his children and Michael Hook, his longtime advisor and Chief of Staff are amongst the largest stockholders of the small biotech firm.
Yeah, it’s gross. Collins making the phone call and acting like a big shot is gross too. Has the law been broken? I don’t think so. Is Collins doomed because of this behavior? Not a chance.
To imply that Chris Collins held a stock for 15 years, ran for County Executive, lost, ran for Congress, in a wild scheme to make $3 million dollars in stocks is absurd. He is worth well north of $120 million. Collins has many businesses involved in the medical field. Are we saying he is disqualified from every authoring legislation or amendments because he may profit from them in the future?
Here is what no one is saying, “Chris Collins’ amendments to the bill were actually really good amendments.” The issue here is the behavior of what is expected of our elected officials.
Collins behaved poorly. Should never be on a cell phone near journalists bragging about his stock tips. Tom Price, should not be taking stock advice from his peers on the floor of congress.
This is a Tom Price problem, not a Chris Collins problem.
What Collins did was the equivalent of picking up the back up quarterback in a fantasy league when the star QB is injured. Anyone who was following the market could have made the same decision and made more money on other companies that do the same thing bigger and better. The stock opened the day at $1.50 and closed at $1.46.
Unless other evidence surfaces, he did not appear to use his position and leverage as a Board Member to offer shares at a reduced cost. If there was a new product the company was going to market with and he told his friends to invest, that too is murky, but not illegal. The market turns on new drugs as quickly as it rewards the early bird for jumping first. For every Viagra, there is a thalidomide. This is not insider trading. Board members have to follow the SEC. They can’t purchase bulk stock until announcements are made and rules are followed. If Collins broke any of those rules, we will know quickly.
But can we be honest? Confirmation hearings are not court proceedings. There is a lot tossed at the wall. Most slides off and onto the floor.
I have been very vocal in my criticism of Mr. Collins in the past. I have no issue calling him out when and if he does something wrong. In this case, his only sin is quite frankly, being Chris Collins. He is the same brash, self-congratulating man that we have known for over twenty years. The truth is he is a good and decent man. His flaw is that he will the first one in the room to remind you of that. He is calculating, self interested above all other concerns (ask Carl Paladino about his statement of support during his recent BPS issue) but he is not a bad person. Tom Price will be a great HHS secretary with a lot of work to do usher in the new healthcare plan in the wake of the Obamacare disaster.
To me, unless we are hit with a meteor of new information, this is much ado about nothing.