Update: 12:57 p.m. EDT Aug. 8: In a news conference Wednesday in New York City, U.S. Attorney Geoffrey Berman said Collins "placed family and friends above public good."
Collins “cheated our markets and judicial system,” Berman said.
Update: 11:51 a.m. EDT Aug. 8: Speaker of the House, Paul Ryan, has removed Collins from the House Energy and Commerce Committee.
"While his guilt or innocence is a question for the courts to settle, the allegations against Rep. Collins demand a prompt and thorough investigation by the House Ethics Committee. Insider trading is a clear violation of the public trust," Ryan said in a statement on his website.
The case relates to an Australian biotech company, called Innate Immunotherapeutics, where Chris Collins served on the board. The company developed a drug intended to treat secondary progressive multiple sclerosis.
Prosecutors state that Collins and the two others used nonpublic information about the results of a drug trial to avoid over $768,000 in losses they would have incurred if they traded the stock after the drug trials became public.
The three men are facing charges of conspiracy, wire fraud and other counts.
Collins has denied any wrongdoing.
"We will answer the charges filed against Congressman Collins in Court and will mount a vigorous defense to clear his good name," attorneys representing Chris Collins said in a statement on his website. "It is notable that even the government does not allege that Congressman Collins traded a single share of Innate Therapeutics stock. We are confident he will be completely vindicated and exonerated."
Collins was the first sitting member of Congress to endorse Trump's presidential bid, CNN reported.
The 68-year-old three-term incumbent represents New York’s 27th Congressional District, which includes Buffalo and Rochester.
Collins is up for re-election in November.
He is expected to appear in federal court later Wednesday in Manhattan.