Dighton Police Chief Placed on Leave Following Insider Trading Charges
DIGHTON (WBSM) — Town officials in Dighton have placed the chief of police on leave and suspended a reserve officer after both were charged by the U.S. Securities and Exchange Commission with insider trading before a pharmaceutical merger.
The Dighton Board of Selectmen met in emergency session Thursday evening and voted unanimously to place Police Chief Shawn P. Cronin on administrative leave.
The board then unanimously voted to name Administrative Sergeant George Nichols to the position of Acting Chief of Police. Once named to the position, Nichols suspended Reserve Officer Joseph Dupont.
The SEC filed insider trading charges against five individuals today, including Cronin and Dupont, “arising from trading before the announcement of a tender offer by Alexion Pharmaceuticals Inc. to acquire Portola Pharmaceuticals Inc. in May 2020,” according to an SEC release.
The SEC alleges that Dupont, who was a vice president and part of the acquisition team at Alexion, “knowingly or recklessly tipped confidential information about the acquisition to his close friend Shawn Cronin, the police chief.”
The complaint alleges that Cronin then shared the information with Jarrett Mendoza, another close friend, and family friend Stanley Kaplan, who provided Cronin with advice on trading strategies. Kaplan then allegedly shared the information with friend and colleague Paul Feldman. Kaplan and Feldman allegedly passed the information on to family members and friends.
The SEC said that Portola’s stock price increased more than 130 percent on the day of the acquisition announcement, and that the four defendants who traded on the information made more than $2.3 million in profit, while others tipped off to the information made more than $1.7 million.
According to the SEC’s complaint, Cronin made $72,000, Mendoza made $39,000, Kaplan brought in $472,000, and Feldman made $1.73 million.
“After realizing their profits, Kaplan texted Feldman in Russian, ‘Let’s hope our golden goose will continue laying golden eggs!’ the SEC said in the complaint.
“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.”