The charges, brought by the Manhattan U.S. Attorney's office, relate to securities of Innate Immunotherapeutics, an Australian biotechnology company on whose board Collins served.
"We are confident he will be completely vindicated and exonerated", they said in a statement.
The third-term congressman, who represents parts of Buffalo and Rochester, was due to appear in court later today.
The charging documents portray a scramble by the congressman and others in the wake of bad news about the drug trial.
Christopher Collins has been indicted on insider trading charges, federal prosecutors announced Wednesday.
A United States congressman has been accused of using inside information to make illicit stock trades.
When news that it had failed broke on 26 June 2017, the Innate stock price plummeted 92% in a single day.
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Collins gained personal benefit and provided nonpublic information to his son Cameron Collins who sold almost $1.4 million of Innate Immunotherapeutics shares, according to a complaint filed by the Securities and Exchange Commission.
The SEC has sought to ban Collins from being a director of a publicly traded company and for his co-defendants to forfeit the money they saved through the sale of Innate stock. "Federal prosecutors said Collins tipped his son to the failure of a test drug for multiple sclerosis", he writes.
Collins was one of Trump's first congressional supporters.
Attorneys for Cameron Collins said, "We intend to mount a vigorous defense on behalf of our client".
The arrest of a sitting Congressman facing re-election in November may have implications for Rep. Chris Collins, R-N.Y. Reps. John Culberson of Houston and Mike Conaway of Midland had also bought shares in the firm, though they apparently didn't dump shares shortly before the price crashed - unlike Collins' son, whose well-timed sale is at the heart of the insider trading case.
Price, who resigned in September 2017 after criticism of his use of private and military planes for travel, accumulated an interest in the company at around 40 cents a share in 2015 and 2016, according to his financial disclosures.
The congressman's shares of Innate were held in Australia, preventing him from selling the stock before the announcement sank its value.
Neither the Speaker, nor House Democratic Leader Nancy Pelosi, called for Collins to resign.