SEC Announces Final Judgement Against Innate Traders

Lauren and Dorothy Zarsky must return money, pay a fine. Case against Collins ongoing

August 16, 2018 - 2:14 pm

BUFFALO, N.Y. (WBEN/ABC) - The Securities and Exchange Commission announced the entry of final judgments against two traders who received tips of material, nonpublic information about negative drug trial results for Innate Immunotherapeutics.

Lauren Zarsky and her mother, Dorothy Zarsky, consented to the entry of final judgments without admitting or denying the charges that they sold their shares of Innate based on tips they received from Cameron Collins, Lauren Zarsky's boyfriend. The SEC separately charged U.S. Congressman Christopher Collins, an Innate board member, with tipping his son, Cameron Collins. Cameron Collins and another individual, Stephen Zarsky, were charged with trading and tipping others on the basis of the material, nonpublic information.

Lauren Zarsky agreed to disgorge her ill-gotten gains of $19,440, plus prejudgment interest of $839, and pay a civil penalty of $19,440.  Dorothy Zarsky agreed to disgorge her ill-gotten gains of $22,600, plus prejudgment interest of $975, and pay a civil penalty of $22,600. The final judgments enjoin Lauren Zarsky and Dorothy Zarsky from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Pursuant to a settlement offer, the Commission issued an order suspending Lauren Zarsky, a CPA from appearing or practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC's order permits her to apply for reinstatement after five years.

The SEC's case against Christopher Collins, Cameron Collins, and Stephen Zarsky is ongoing. The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and permanent injunctions. It also seeks an officer and director bar against Christopher Collins.

It did not say whether Lauren and Dorothy Zarsky will cooperate in the criminal case against Chris Collins, Cameron Collins, and Stephen Zarsky.

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