Former U.S. House Rep. Christopher Collins pleaded guilty and agreed to settle the insider trading charges filed against him by the Securities and Exchange Commission (SEC).

The former lawmaker’s son, Cameron Collins and Stephen Zarsky, also pleaded guilty and settled to related criminal charges.

The insider trading charges against the defendants were in connection with securities of Innate Immunotherapeutics, an Australian biotechnology company.

The SEC alleged that the older Collins then an independent director of Innate Immunotherapeutics, tipped his son about the non-public negative trial results for a multiple sclerosis drug developed by the biotech company.

Cameron traded on the information and tipped others including Zarsky. They sold almost 1.7 million shares of Innate Immunotherapeutics before the biotech company announced the negative trial results. They avoided combined losses of more than $700,000, according to the Commission.

Under the settlements, Collins is prohibited from serving as an officer or director of a public company. His is son and Zarksy agreed to disgorge the losses they avoided as a result of the insider trading.

The defendants agreed to the entry of final judgments that would resolve all the charges and permanently banning them from violating the anti-fraud provisions of the securities laws. The settlements are subject to court approval.

Defendants’ settlements should deter others from committing insider trading

In a statement, SEC Enforcement Division Co-Director Stephanie Avakian, said, “Insider trading undermines investor confidence in the fairness and integrity of the securities markets. Today’s settlements, along with the previous criminal pleas, should deter others who may be tempted to engage in this pernicious conduct.”

“Our complaint alleged in detail how the defendants obtained and misused material nonpublic information for their own financial and personal gain. Upon approval, this resolution will strip former Representative Collins of the privilege of serving as an officer or director of a public company and ensure that the traders are deprived of their ill-gotten gains,” commented SEC Enforcement Division Co-Director Steve Peikin.

Collins is a Republican who served the 27^th congressional district of the State of New York. In August, he dropped his re-election bid amid the insider trading charges against him. He previously claimed that the allegations against him were meritless and vowed to mount a vigorous defense in court to clear his name.