INSIDER TRADING RING EXPOSED! VP TIPPED FRIEND TO MILLIONS IN ILLEGAL TRADES!

SEC v. Joseph M. Dupont, Shawn P. Cronin, Stanley Kaplan, et al. — U.S. Securities and Exchange Commission Litigation Release No. 26209, dated January 3, 2025.

The SEC charged five defendants with insider trading related to the acquisition of Portola Pharmaceuticals Inc. The defendants illegally traded on material nonpublic information, leading to profits. All five consented to final judgments, including permanent injunctions and officer/director bars. Parallel criminal actions resulted in prison sentences and forfeiture of profits for some defendants.

In Plain English

Imagine someone learns a secret about a company before anyone else. They tell a friend, who tells other friends. These friends then buy or sell the company's stock based on that secret information, making money unfairly. The SEC stepped in to stop this and hold them accountable, ordering them to pay back profits and face other penalties.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Confidential Information Obtained Joseph M. Dupont, a vice president at Alexion Pharmaceuticals, learned confidential information about the impending acquisition of Portola Pharmaceuticals Inc.
2. First Tip Dupont shared this material, nonpublic information with his close friend, Shawn P. Cronin.
3. Information Chain Cronin then provided the confidential acquisition details to Stanley Kaplan and Jarett G. Mendoza.
4. Further Tipping Stanley Kaplan, in turn, passed the information along to Paul Feldman.
5. Profitable Trading by Tipped Parties Cronin, Mendoza, and Kaplan used this information to purchase Portola securities before the acquisition was publicly announced, realizing illegal profits.
6. More Trading Paul Feldman also used the nonpublic information to trade Portola securities profitably.
7. Extended Tipping Kaplan and Feldman further disseminated the information to their family members and friends, who also engaged in profitable trading.

The Enforcement Action

On December 23, 2024, the U.S. District Court for the Southern District of New York entered final judgments against Joseph M. Dupont, Shawn P. Cronin, Stanley Kaplan, Paul Feldman, and Jarett G. Mendoza, resolving the SEC's insider trading case filed on June 29, 2023. The judgments provide permanent injunctive relief and bar each defendant from serving as an officer or director of a publicly traded company. Dupont was ordered to pay a $36,000 civil money penalty and was fined $75,000. Cronin was ordered to forfeit $71,996.06 in profits, sentenced to three months' imprisonment, and fined $5,000. Kaplan was ordered to forfeit $472,053.61 in profits and sentenced to five months' imprisonment. Feldman was ordered to forfeit $1,730,827.54 in profits, sentenced to three months' imprisonment, and fined $25,000. Mendoza was ordered to forfeit $38,648.58 in profits. All five defendants had previously pled guilty to criminal charges in parallel actions brought by the U.S. Attorney’s Office for the Southern District of New York.

Named in this action: Joseph M. Dupont, Shawn P. Cronin, Stanley Kaplan, Paul Feldman, Jarett G. Mendoza.

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