The following morning, almost two hours prior to the market opening, Cameron Collins and Zarsky allegedly entered orders to sell Innate shares just after the stock market opened. Over the next two trading days, Cameron Collins allegedly sold nearly 1.4 million Innate shares.
After the trades had been made, Innate publicly announced the negative results of the clinical trial, which caused the company’s stock price to plummet more than 90 percent.
Through the trades, Cameron Collins and Zarsky avoided losses of more than $700,000. The SEC complaint also alleges that the duo contacted other friends and family members, who also sold Innate shares to avoid catastrophic losses.
“The investigation yielded a detailed footprint left by the defendants, revealing their frantic efforts to sell shares and warn others before Innate announced bad news,” said Steven Peikin, co-director of the SEC’s enforcement division.
The SEC’s complaint charged Christopher Collins, Cameron Collins and Zarsky with violating Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5 and Section 17(a) of the Securities Act of 1933. The complaint seeks disgorgement of ill-gotten gains plus interest, penalties and permanent injunctions. It also seeks an officer and director bar against Christopher Collins going forward.
