A Republican US congressman from New York has been charged with taking part in an insider trading scheme involving an Australian biotechnology company on whose board he served.
The case relates to Innate Immunotherapeutics Ltd, where Christopher Collins, 68, one of President Donald Trump's earliest supporters, sat on the board and held a 16.8 per cent stake.
"These charges are a reminder that this is a nation of laws, and that everybody stands equal before the bar of justice," US Attorney Geoffrey Berman said at a news conference in Manhattan on Wednesday.
Two lawyers for Collins, Jonathan Barr and Jonathan New, said in a statement they were confident he would be "completely vindicated and exonerated".
The indictment charged Collins, his son Cameron, and Stephen Zarsky, the father of Cameron Collins' fiancee, with securities fraud, wire fraud and other crimes. All three also face civil charges by the US Securities and Exchange Commission.
All three defendants were expected to appear in the US District Court in Manhattan later Wednesday.
Prosecutors said that in June 2017, while attending the congressional picnic at the White House, Collins learned in an email from Innate's chief executive that a trial for its proposed secondary multiple sclerosis drug MIS416 had failed.
According to the indictment, Collins immediately called his son and told him the news. Cameron Collins in turn told his fiancee, her parents and a friend, and Stephen Zarsky went on to tip his brother, his sister and a friend, the indictment said.
Christopher Collins did not trade his own Innate stock, which lost millions of dollars in value, according to the indictment.
Prosecutors said the congressman knew he was "virtually precluded" from trading in part because he already faced a congressional ethics probe related to his Innate holdings.
However, prosecutors said others avoided more than $US768,000 in losses when Innate's share price plunged to 3.5 cents from 45 cents after the drug's failure was announced.
Sydney-based Innate did not immediately respond to a request for comment outside business hours.
Collins is not the only Republican lawmaker who has been scrutinised for buying Innate shares.
Tom Price, a high-ranking Republican in the House of Representatives who sits on congressional committees that shape US health policy, was grilled last year about his purchase of Innate stock at his confirmation hearing to become secretary of health and human services last year.
Price said Collins had told him about Innate.
Collins, who also sits on a key subcommittee that influences US health policy, snapped up so much of the stock he is Innate's biggest shareholder.
Collins' children, Caitlin and Cameron, are Innate's third and fourth biggest shareholders and his chief of staff, Michael Hook, is also a top shareholder.