The Securities and Exchange Commission (SEC) has revealed insider trading charges against five—including former Alexion Vice President Joseph Dupont and a Massachusetts police chief—who allegedly took advantage of prior knowledge of Alexion’s 2020 acquisition of Portola Pharmaceuticals.
Dupont, 44, of Rehoboth, Massachusetts, was the head of go-to market transformation and business operations for Alexion until April of this year. He is alleged to have tipped off his childhood friend Shawn Cronin, the police chief of Dighton, Massachusetts, about the company’s intent to buy out Portola.
Cronin, 43, is alleged to have passed the information to two other friends, one of whom told Paul Feldman, 48, of the deal. In all, four bought stock in Portola, which netted them more than $2.3 million, including $1.73 million to Feldman, the SEC said.
One of the friends, Slava Kaplan, 45, who made $472,000 from his trades, texted Feldman in Russian: “Let’s hope our golden goose will continue laying golden eggs,” the SEC alleges.
Kaplan and Feldman also tipped off others whose trades allowed them to gain more than $1.7 million, according to the indictment.
Dupont, who was arrested Thursday, learned of Alexion’s intent to purchase Portola on Jan. 31, 2020, according (PDF) to court documents. The buyout was announced May 5, with the company’s stock price swelling by 130%.
“These traders made millions of dollars by exploiting information about an upcoming merger that was supposed to have been held in strict confidence,” Thomas Smith, associate director of the SEC’s New York regional office, said in a release.
Dupont has been charged with two counts of securities fraud and one of tender offer fraud. Each of the counts carries a maximum sentence of between 20 and 25 years in prison.
Feldman faces the most criminal charges. The SEC also is pursuing injunctive relief, disgorgement and civil penalties. One of those charged, Jarrett Mendoza, who made $39,000 from his stock deals, has already pleaded guilty.
Also on Thursday, in another insider trading charge, the SEC arrested a former statistician at Pfizer and an associate who made more than $350,000 from stock purchases that they executed before the day before the company made results public about a trial of COVID-19 oral antiviral Paxlovid.