Watchdog Q&A

Published — August 23, 2019

Q&A: Jerry Zremski on how a New York Rep. lost millions

Former U.S. Rep. Chris Collins, center, arrives at Federal court, Tuesday, Oct. 1, 2019, in New York. Collins is expected to plead guilty in an insider trading case Tuesday, a day after saying he was quitting Congress. (AP Photo/Mary Altaffer)

Introduction

We’re publishing a series of Q&As with reporters who have uncovered powerful investigative stories.

This week we talked to Jerry Zremski, the Washington bureau chief for the Buffalo News. Zremski reported on how New York Rep. Chris Collins lost millions in stock after bragging to colleagues to invest. Its market value plunged 94% after it announced that its key product, an experimental treatment for multiple sclerosis, failed in clinical trials. Collins was arrested and charged with insider trading about a year after the story ran. 

How did you get the story? 

It all started with a news release — and my discovery of an oft-told lie. Headlined “Innate Immunotherapeutics receives FDA clearance for MIS416 Investigational New Drug application,” it sounded like such inside baseball that it received almost no attention. But that headline told me that Collins lied to me – again and again.

Whenever I asked him about Innate, he dismissed my questions as irrelevant, saying the company had no business before U.S. regulators. But suddenly it had business before the Food and Drug Administration. So I wrote the story: “Collins said drug company had no business before feds – but it does.”

The next morning, I checked the web and found that Innate’s stock had, as expected, tanked. So I wrote a quick story, focusing on drop in the stock price and Collins’  lost millions.

While working that story, I wondered: Why did Innate send out that good-news press release only a few days before announcing that its drug was a total failure? I suspected the worse: some sort of scheme to boost Innate’s stock price before it crashed. 

So I started Googling to find out if anyone in Australia shared my suspicions. And I came across a hugely important observation from Sean O’Neill, a blogger for the Australian version of the Motley Fool investment website. Before trading in Innate’s stock had been halted, someone had started selling off their shares. I was worried that no other reporter followed the same path, and wondered if perhaps I had somehow gotten this one wrong. More than a year later, on Aug. 8, 2018, I found out some very important people — federal prosecutors in New York – thought I was right.

What was your biggest challenge reporting this story? 

 The biggest challenge I faced in writing this story was the total lack of cooperation from Collins and his people. The congressman has stopped speaking to me at that point, and everything I got from his people came in the form of a terse email rather than live commentary.

How bad did it get? Collins even tried fundraising off my stories, calling our stories “fake news.”

Not that that slowed me down. When you have been doing this as long as I have — and I’ve been a reporter for more than 35 years — you can smell a good story while you are chasing it, and so I kept chasing it.

In fact, that’s what inspires me: bad smells. By now it’s instinctive. I know that if something doesn’t smell right, it’s probably not right, but it’s probably a good story.

You can find Jerry on Twitter here.

Read more in Inside Public Integrity

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