‘Ill-gotten gains’: Massachusetts police chief, 4 others charged in insider trading scheme

DIGHTON, Mass. — A Massachusetts police chief along with four other men have been charged in an insider trading scheme in 2020 that netted them over $2 million in “ill-gotten gains,” according to court documents filed by the U.S. Securities and Exchange Commission.

A complaint filed in New York’s Southern District Court Thursday alleges that Dighton Police Chief Shawn Cronin received confidential details about a merger between two pharmaceutical companies and traded on that information illegally.

Joseph Dupont, 44, of Rehoboth, and a close friend of Cronin’s, was a senior employee at Alexion when he worked on the company’s acquisition of Portola beginning in January 2020, according to the SEC. Portola was a biopharmaceutical company focused on blood disorders.

Dupont allegedly tipped Cronin off about the Alexion-Portola acquisition deal months before it was announced, even allegedly texting Cronin in April, “Remember that stock I told you about? Good time to buy.”

Cronin then used this information to purchase stock and call options and told his close friends, Jarett Mendoza, 44, of North Dighton, and Stanley Kaplan, 45, of Hopewell Junction, New York, according to court documents. Kaplan would then allegedly tell his friend, Paul Feldman, 48, of Poughsquag, New York, about the upcoming merger, and that information would then allegedly be told to more coworkers.

All four men would invest in Portola stock in April before the deal was finalized on May 5.

Cronin, Kaplan, Feldman, and Mendoza would stand to profit more than $2.3 million on the day the deal went public, as Portola’s stock price jumped by over 130%, the SEC says. The people who Kaplan and Feldman told would also allegedly make $1.7 million off the announcement.

In a brazen text, Kaplan would text Feldman on May 15, “Let’s hope our golden goose will continue laying golden eggs!” in reference to the Alexion-Portola deal.

Dupont, Cronin, Mendoza, Kaplan, and Feldman were charged with violating the antifraud and tender offer provisions of the federal securities laws by the SEC. Furthermore, the SEC is seeking permanent injunctive relief, disgorgement with prejudgment interest and civil penalties, and officer and director bars against all five men.

The Town of Dighton is holding an emergency Board of Selectman meeting Thursday night to determine whether or not to place Cronin on administrative leave and appoint an acting police chief.

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