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Dighton police chief placed on leave after being charged for alleged insider trading

Shawn Cronin, 43, allegedly bought stocks based on information a reserve Dighton police officer gave him about the drug company he worked for.

By Susannah Sudborough

June 29, 2023

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The Dighton Select Board voted unanimously to place 43-year-old Police Chief Shawn Cronin on administrative leave Thursday night after he was charged for alleged insider trading earlier in the day.

In an emergency meeting, the board voted unanimously to make Administrative Sgt. George Nichols acting chief of police, the board said in a press release.

Nichols then immediately suspended Reserve Police Officer Joseph Dupont, a 44-year-old Rehoboth resident who was also charged for alleged insider trading with Cronin, the release said.

Earlier on Thursday, the U.S. Attorney for the Southern District of New York charged Cronin, Dupont, and two of their friends for alleged insider trading in connection with the acquisition of Portola Pharmaceuticals by Alexion Pharmaceuticals in 2020.

Collectively, Cronin, Dupont, and their friends allegedly made more than $2.2 million by illegally trading Portola stocks based on knowledge of the acquisition before it was made public, the U.S. Attorney said in a press release.

Cronin has served as Dighton police chief since July 2022. The select board did not respond to a request for comment Thursday night.

The alleged insider trading

In 2020, Dupont was a vice president at Alexion and was informed of its acquisition of Portola on Jan. 31, 2020, the release said. Alexion is a Boston-based AstraZeneca subsidiary that focuses on creating drugs to treat rare diseases.

In April 2020, Dupont allegedly told Cronin — a childhood friend of his — of the acquisition. With Dupont’s guidance, Cronin, who was a sergeant with Dighton police at the time, allegedly purchased shares and options of Portola stock, the release said.

Cronin, a Dighton resident, then allegedly told Jarett Mendoza, another of their childhood friends, about the acquisition, and helped him purchase Portola stock, the release said.

Cronin also allegedly told his friend and Hopewell Junction, New York, resident Slava “Stanley” Kaplan of the acquisition, and helped him purchase Portola stock, the release said. Kaplan, 45, then allegedly helped Cronin use trading strategies to maximize returns on his Portola stock.

Kaplan allegedly told his friend and Poughquag, New York, resident Paul Feldman of the acquisition, the release said. Feldman, 48, then allegedly “aggressively” bought Portola stock and told others of the acquisition.

The charges

Cronin and Dupont surrendered themselves to police Thursday, and Kaplan and Feldman were arrested, the release said.

The U.S. attorney charged the four men with multiple counts of charges including securities fraud, tender offer fraud, and conspiracy to commit securities and tender offer fraud. Each count carries a maximum sentence of at least 20 years in prison.

The U.S. Attorney’s office also unsealed charges against Mendoza, who pled guilty under a cooperation agreement, the release said.

“Insider trading is not a quick buck. It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison,” U.S. Attorney Damian Williams said in the release.

The Securities and Exchange Commission also filed charges against Dupont, Cronin, Mendoza, Kaplan, and Feldman.

“This case shows our continuing commitment to rooting out those who cheat the system by misusing material nonpublic information,” Associate Director of the SEC’s New York Regional Office Thomas P. Smith, Jr. said in a statement. “These traders made millions of dollars by exploiting information about an upcoming merger that was supposed to have been held in strict confidence.”