DIGHTON – Town Police Chief Sean Cronin was charged Thursday with insider trading that reaped $72,000 for himself and an additional $1.6 million for his friends and their associates.
The U.S. Securities and Exchange Commission accused Cronin and four associates of allegedly 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.
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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 close friend Joseph Dupont, a vice president who was part of the acquisition team at Alexion. The police chief then passed that information to Jarett Mendoza, a sales rep for the medical equipment company. Cronin also alerted Stanley Kaplan, who provided advice to the chief on trading strategies. Kaplan, in turn, allegedly tipped off colleague Paul Feldman.
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 more than 130%.
After netting their profits, Kaplan texted Feldman in Russian, “Let’s hope our golden goose will continue laying golden eggs!”
Mendoza has already 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.
“This case shows our continuing commitment to rooting out those who cheat the system by misusing material nonpublic information,” said Thomas P. Smith Jr., associate director of the SEC’s New York regional office. “These traders made millions of dollars by exploiting information about an upcoming merger that was supposed to have been held in strict confidence.”
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.
