Shawn Cronin, the police chief of Dighton, Massachusetts, has informed town officials of his intention to resign effective September 30th, after being charged in a multimillion-dollar insider trading scheme as reported by WCVB. His resignation comes three months after the U.S. Securities and Exchange Commission (SEC) accused him of collectively making more than $2.2 million in illegal profits by trading in stocks and options based on insider information received according to Boston.com.
According to prosecutors, Cronin engaged in an insider trading scheme centered around the acquisition of one pharmaceutical company by another. Joseph DuPont, a former vice president at Alexion Pharmaceuticals Inc., provided Cronin with information about Alexion's upcoming acquisition of Portola Pharmaceuticals Inc. before it was publicly announced as reported by WCVB.
Cronin and DuPont, who were childhood friends, each face multiple counts of securities and tender offer fraud, carrying a maximum sentence of 20 years in prison according to Boston.com.
Prosecutors allege that Cronin purchased shares of Portola stock and out-of-the-money call options for Portola stock based on the information he received from DuPont. Cronin then shared the information with two of his friends, Jarett Mendoza and Stanley Kaplan, who advised him on trading strategies. Kaplan further passed the information to his friend and colleague, Paul Feldman as stated in WCVB article.
The four men, along with several relatives and friends whom Kaplan and Feldman alerted, invested in Portola stock before the deal was finalized. Mendoza has already pleaded guilty pursuant to a cooperation agreement according to Boston.com.
In a statement, Dighton Board of Selectmen Chairman Peter Caron expressed gratitude to Cronin for his service to the town and its residents. The board did not state if Cronin's resignation is related to the charges he faces according to Boston globe.
Following the charges, the Dighton Board of Selectmen held an emergency meeting and placed Cronin on paid administrative leave pending an administrative investigation as stated in WCVB article.
After Cronin's resignation, it is unclear who will be appointed as the town's new police chief. When Cronin was placed on leave in June, Administrative Sgt. George Nichols was named acting chief.
While the investigation is ongoing, Alexion Pharmaceuticals has remained reticent about the situation, stating that they cannot comment on legal matters involving former employees.
