The U.S. Attorney’s Office for the Southern District of New York announced Thursday, June 29 that the case is one of four separate insider trading cases that reportedly netted $30 million in total.
The names in the case are:
- Sean Cronin43, of Dayton, Bristol County, Massachusetts, Chief of the Dayton Police Department
- Joseph Dupont44 years old, Rehoboth, Bristol County, Massachusetts
- Slava Kaplan45, of Hopewell Junction, Dutchess County, NY
- Paul Feldman48 years old, Poughquag, Dutchess County, NY
DuPont was vice president of Alexion Pharmaceuticals at the time and learned of the impending acquisition of Portola Pharmaceuticals in January 2020, according to prosecutors.
He allegedly provided material non-public information (MNPI) about the merger to childhood friend Cronin before the merger was made public in April 2020.
Cronin, who was an officer with the Dayton Police Department at the time and supervised DuPont in his capacity as a police reserve officer, then used the information to buy Portola stock and put out a variety of out-of-the-money call options, according to prosecutors. choose.
Cronin then shared the nonpublic information with Kaplan, investigators said.
“Cronin shared the MNPI with Kaplan so that Kaplan could proceed with the transaction prior to the acquisition and had Kaplan assist Cronin in developing a transaction strategy to maximize the Ronin’s own insider trading profits.”
“Based on Cronin’s MNPI to Kaplan, Kaplan purchased Portola stock and options.”
Kaplan then passed the secret information to Feldman, who “aggressively” purchased the Portola call options, according to prosecutors.
In May 2020, the news of Alexion’s acquisition of Portola became public, and Portola’s stock price rose sharply.
Cronin, Kaplan and Feldman allegedly made more than $2.2 million in illegal profits collectively after selling their Portola stock and Portola stock call options.
All three men, as well as DuPont, were arrested Thursday.
Cronin, Kaplan and Feldman were each charged with securities fraud, tender offer fraud, and conspiracy to commit securities fraud and tender offer fraud.
DuPont was charged with two counts of securities fraud and one count of tender offer fraud.
Cronin’s arrest sparked an emergency meeting between Dayton Town Executive Michael Mullen and the Dayton Board of Elections, during which the board voted unanimously to place Cronin on administrative leave.
The board then voted unanimously to appoint Executive Sheriff George Nichols as acting police chief.
DuPont was also suspended.
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