The police chief of Dighton, Massachusetts is among a handful of individuals facing insider trading charges in a scheme that allegedly netted the men more than $2.2 million in illegal profits, according to federal investigators.
Dighton Police Chief Shawn Cronin is among five men charged in the insider trading scheme. The men traded in stocks and options based on confidential information about one pharmaceutical company’s acquisition of another company, according to the US Attorney’s Office in the Southern District of New York.
Cronin was placed on administrative leave Thursday.
According to investigators, Dighton reserve officer Joseph Dupont, a friend of Cronin, was vice president of Boston-based Alexion Pharmaceuticals, Inc. when he learned that the firm was going to purchase another company, Portola Pharmaceuticals, Inc. Dupont allegedly told Cronin about the deal in April 2020, before it was made public.
Alexion’s acquisition of Portola, which is based in South San Francisco, California, was publicly announced on the morning of May 5, 2020. Portola’s stock jumped in value. Cronin and others named in the complaint sold their shares of Portola and options for Portola stock, reaping more than $2.2 million in illegally obtained profits, prosecutors said.
Cronin, who was named police chief last year, allegedly received $72,000 from the scheme. An effort to reach Cronin for comment Friday was unsuccessful. It wasn't immediately known if he has an attorney.
Cronin has been charged with three counts each of of securities fraud and tender offer fraud under Title 15, each of which carries a maximum sentence of 20 years in prison; one count of securities fraud under Title 18, which carries a maximum sentence of 25 years in prison; and one count of conspiracy to commit securities fraud and tender offer fraud, which carries a maximum sentence of five years in prison.
Cronin and Dupont appeared in federal court in Boston Thursday. Cronin was released on $250,000 bond, and Dupont was released on $200,000 bond.
Dupont also was suspended.
Their next court dates will be held in New York.