DIGHTON – Town Police Chief Sean Cronin was placed on administrative leave Thursday night after he was charged in an insider trading scheme that garnered $72,000 for himself and millions of dollars in trading profits for numerous associates.
The Dighton Board of Selectmen met in an emergency session late Thursday and voted unanimously to replace Cronin with Administrative Sgt. George Nichols who will assume the role of Acting Chief of Police.
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Earlier Thursday, the U.S. Securities and Exchange Commission had accused Cronin and four other men of trading on nonpublic information in May 2020 that involved a bid by Alexion Pharmaceuticals Inc., of Boston, in its acquisition of Portola Pharmaceuticals Inc., of San Francisco.
Cronin was released on $250,000 bond Thursday after an appearance in federal court in Boston.
After Alexion announced the acquisition, the Financial Industry Regulatory Authority launched an inquiry and asked Alexion if any employees had participated in well-timed trades of Portola stock, according to the federal indictment.
Cronin, 43, was charged with three counts of securities fraud and three counts of tender offer fraud, each of which carries a maximum sentence of 20 years in prison; one count of securities fraud under Title 18, which carries a maximum sentence of 25 years in prison; and one count of conspiracy to commit securities fraud and tender offer fraud, which carries a maximum sentence of five years in prison.
According to the SEC, Cronin received the confidential information from his childhood friend Joseph Dupont, 44, a vice president at Alexion who was part of the acquisition team.
Dupont also served as a reserve officer on the Dighton police force where he had been supervised by Cronin.
Immediately after being named Acting Chief, Nichols suspended Dupont, according to a news release posted by the Town of Dighton.
The SEC said that after Cronin had been tipped off to the impending acquisition, he passed that information to Jarett Mendoza, 44, a sales rep for a medical equipment company. Cronin also alerted Slava “Stanley” Kaplan, 45, who provided advice to the chief on trading strategies. Kaplan, in turn, allegedly tipped off colleague Paul Feldman, 48.
With their knowledge of the pending acquisition, Cronin, Mendoza, Kaplan and Feldman bought Portola stock and call options prior to the announcement, according to the SEC.
Kaplan and Feldman allegedly passed the inside information on to other family members and friends, who more than doubled their money when Portola’s stock price soared.
After netting their profits, Kaplan texted Feldman in Russian, “Let’s hope our golden goose will continue laying golden eggs!”
Mendoza already has admitted guilt as part a cooperation agreement with authorities.
Cronin has served as a police officer for over 18 years, eight of which have been in a supervisory role. The Dighton Police Department hired Cronin as a patrolman in 2006 and appointed him chief in 2022, according to the department’s website. On his LinkedIn page, Cronin describes himself as performing duties with “exceptional merit and integrity.”
The U.S. Attorney’s Office for the Southern District of New York also announced parallel criminal charges.
The complaint charges all five defendants with violating the anti-fraud and tender offer provisions of the federal securities laws.
Contact PBN staff writer Sam Wood at Wood@PBN.com
