Five Individuals Charged with Insider Trading Ahead of Alexion Pharmaceuticals Acquisition

The Securities and Exchange Commission has charged five individuals with insider trading in relation to the May 2020 tender offer by Alexion Pharmaceuticals Inc. to acquire Portola Pharmaceuticals Inc. The defendants are accused of misusing confidential information from vice president Joseph Dupont, who is part of the acquisition team at Alexion, to buy up stock and out-of-the money call options prior to the public announcement. Shawn Cronin, the police chief in Dighton, Massachusetts, allegedly obtained the information from Dupont and shared it with four other individuals: Jarett Mendoza, Stanley Kaplan, and Paul Feldman. This group then passed the information on to others who also profited from the subsequent 130 percent spike in Portola stock after the acquisition announcement. In total, the group reaped over $2.3 million in profits, while their contacts made an additional $1.7 million. The SEC’s complaint seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and officer and director bars against all five defendants. The U.S. Attorney's Office for the Southern District of New York has also announced parallel criminal charges.