On January 3, 2025, the Securities and Exchange Commission announced that it had obtained final judgments against five friends – Joseph Dupont, Shawn Cronin, Stanley Kaplan, Paul Feldman, and Jarett Mendoza – who were charged, in 2023, for their participation in an insider trading scheme.
According to the SEC’s complaint, which was filed in the Southern District of New York in June 2023, Dupont was serving as a vice president at Alexion Pharmaceuticals when he obtained material nonpublic information regarding Alexion’s planned acquisition of Portola Pharmaceuticals – information he allegedly shared with his close friend Cronin. Based on the tip, Cronin allegedly purchased Portola securities and shared the MNPI with his friends Mendoza and Kaplan who also purchased Portola securities. The SEC alleges that Kaplan shared the MNPI with Feldman who also purchased Portola securities. According to the complaint, Kaplan and Feldman also shared the MNPI with family and friends who also purchased Portola securities and profited from the illicit trades. After the acquisition was announced publicly, Portola’s stock increased by more than 130 percent enabling Cronin, Mendoza, Kaplan, and Feldman to collectively generate more than $2.3 million in unlawful profits. The SEC further alleges that Kaplan’s and Feldman’s family and friends who engaged in unlawful Portola trades realized more than $1.7 million in additional profits. At the time, federal prosecutors concurrently filed criminal charges against the defendants.
The SEC charged all five defendants with violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder and, on December 23, 2024, they each consented to the entry of final judgments in their SEC cases. In separate judgments, the defendants were permanently enjoined from engaging in further securities violations and were barred from serving as an officer or director of a publicly traded company. Dupont was additionally ordered to pay a $36,000 civil monetary penalty.
In 2023, all five defendants pleaded guilty to securities fraud to resolve the parallel criminal charges filed against them. In June 2023, as part of a cooperation agreement with federal prosecutors, Mendoza was ordered to forfeit approximately $38,000 in illicit profits. In January 2024, Dupont was sentenced to three years’ probation and fined $75,000, while Kaplan received five months of imprisonment and was ordered to pay forfeiture of more than $470,000 for his illegal trades. Weeks later, on January 23, 2024, Cronin and Feldman pleaded guilty to securities fraud, and, in May 2024, were sentenced for their roles in the scheme. Cronin received three months of imprisonment, was fined $5,000 and was ordered to forfeit nearly $72,000 in profits, while Feldman was sentenced to three months’ imprisonment, fined $25,000, and ordered to forfeit more than $1.7 million in profits.
SEC Press Release | Final Judgment – Cronin | Final Judgment – Dupont | Final Judgment – Feldman | Final Judgment – Kaplan | Final Judgment – Mendoza | Docket Entries – Cronin and Feldman sentencing