Rep. Chris Collins arrested on insider trading charges

Chris Collins, the conservative congressman from upstate New York, was at the White House in June 2017 for the annual congressional picnic when he received an email.

The chief executive of Innate Immunotherapeutics had “bad news to report,” according to court records. A multiple sclerosis drug the Australian firm had been developing failed a clinical test.

Collins, who served on the company’s board of directors, replied “Wow. Makes no sense. How are these results even possible???”

A minute later, according to court records, Collins began a series of phone calls to his son Cameron to tip him off to the test results “anticipating Cameron Collins would use it to trade and tip others.”

The test results were made public four days later and Innate stock dropped 92 percent. By then, however, Collins, his son and his son’s future father-in-law had avoided $768,000 in losses.

A grand jury returned an indictment charging the trio with insider trading. The men surrendered to the FBI in New York and were awaiting an arraignment in federal court in Manhattan, where prosecutors planned a noon news conference.

“We will answer the charges filed against Congressman Collins in court and will mount a vigorous defense to clear his good name,” a statement from his attorneys said. “We are confident he will be completely vindicated and exonerated.”

Collins, who represents the swath of suburbs between Buffalo and Rochester, was the first U.S. Congressman to endorse Donald Trump’s candidacy. He remains a staunch Trump ally.

Collins, his son Cameron, and Stephen Zarsky pleaded not guilty Wednesday afternoon. The judge set bail at $500,000 each.

The congressman, who left court without comment, was ordered to surrender his diplomatic passport. All three men were ordered to surrender firearms to local authorities.

In what was originally billed as a press conference Wednesday evening, Collins did not take questions but denied the charges brought against him.

"I believe I acted properly and within the law at all times with regard to my affiliation with Innate," Collins said. "The charges that have been levied against me are meritless."

ABC News' Armando Garcia contributed to this report.