Dutchess Man Admits Participating In Insider Trading

POUGHQUAG, NY — A Hudson Valley man is one of two people who admitted participating in an insider trading scheme involving a pharmaceutical company.

Damian Williams, the United States Attorney for the Southern District of New York, announced Tuesday that Paul Feldman, 49, of Poughquag, and Shawn Cronin, 44, of Dighton, Massachusetts, each pleaded guilty to one count of securities fraud in connection with their participation in an insider trading scheme surrounding the announcement of Alexion Pharmaceutical Inc.’s acquisition of Portola Pharmaceuticals Inc.

The men — one a physician and the other a police sergeant — were arrested in June.

Williams said, as a law enforcement leader, Cronin was sworn to uphold the law and was trusted to set an example for junior officers, and as a medical doctor, Feldman held a position of trust and respect in society.

“Rather than live up to their posts, these men broke the rules to try to make a quick buck,” he said. “Their convictions reflect my office’s ongoing commitment to relentlessly rooting out corruption in our financial markets.”

Prosecutors said, in 2020, Feldman, Cronin and others engaged in an insider trading scheme surrounding the announcement of Alexion’s acquisition of Portola. In April 2020, before that acquisition was publicly announced, Cronin’s childhood friend, a then-vice president at Alexion, misappropriated material, non-public information about the acquisition and provided it to Cronin so that he could profitably trade in securities.

In turn, Cronin, who was a police sergeant in Dighton, Massachusetts, at the time and went on to become the police chief, provided another friend with the non-public information about Portola’s pending acquisition — both so that friend could trade in advance of the acquisition and so that that friend would help Cronin in formulating trading strategies to maximize Cronin’s trading profits.

The friend Cronin tipped was a physician who went on to tip his friend and colleague, Feldman.

Feldman, for his part, aggressively bought Portola call options and also told at least five additional individuals who traded on the tip.

After Alexion’s acquisition of Portola was publicly announced the morning of May 5, 2020, causing Portola’s stock price to increase significantly, Cronin, Feldman and others who had purchased shares and options based on the inside information sold their securities, reaping millions of dollars of illegally obtained profits.

Securities fraud carries a maximum sentence of 20 years in prison.

The men will be sentenced May 13.