If Mr. Collins is successfully removed, local party leaders, not the voters, will select the Republican nominee. Others candidates are expected to vie for the nomination.
Democrats hope to use the details of the charges against Mr. Collins outlined in the indictment to help paint both the Trump administration and the Republican-controlled Congress with the broad brush of a “culture of corruption.”
“I respect Chris Collins’s decision to step down while he faces these serious allegations,” Representative Steve Stivers, an Ohio Republican and the chairman of the House Republican campaign committee, said in a statement. “As I’ve said before, Congress must hold ourselves to the highest possible standard.”
While no other lawmakers in Congress have been charged with any wrongdoing related to Innate Immunotherapeutics, five other Republican congressmen also purchased stock in the company in January 2017: John Culberson of Texas; Michael K. Conaway of Texas; Doug Lamborn of Colorado; Billy Long of Missouri; and Markwayne Mullin of Oklahoma. Mr. Long and Mr. Mullin serve on the same health subcommittee of the House Energy and Commerce Committee as Mr. Collins.
Geoffrey S. Berman, the United States attorney in Manhattan who announced the indictment, declined to say if other lawmakers were currently under investigation. “No comment,” he said on Wednesday after the charges were announced against Mr. Collins.
The issue of Innate first burst into public a year and a half ago, when it was revealed that Tom Price, Mr. Trump’s nominee to serve as secretary of the Department of Health and Human Services, had received privileged shares of the drug company, in which Mr. Collins was the largest shareholder.
Mr. Price resigned last September in an unrelated scandal about his use of chartered flights.
Mr. Collins had previously faced an ethics investigation in Congress for his dual role as a congressman and an investor in Innate, which was testing an experimental treatment for multiple sclerosis.
In announcing the indictment of Mr. Collins, Mr. Berman said, “Congressman Collins, who by virtue of his office helps write the laws of our nation, acted as if the law did not apply to him.”