Video recording of SDNY's recent press conference on charges against 70 current and former NYCHA employees
Damian Williams, the United States Attorney for the Southern District of New York, announced today that SHAWN CRONIN and PAUL FELDMAN each pled guilty before U.S. Magistrate Judge Sarah Netburn 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. CRONIN and FELDMAN were arrested in June 2023.
U.S. Attorney Damian 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 our society. Rather than live up to their posts, these men broke the rules to try to make a quick buck. Their convictions reflect my Office’s ongoing commitment to relentlessly rooting out corruption in our financial markets.”
According to the allegations in the Indictment and statements made in public court proceedings:
In 2020, CRONIN, FELDMAN, 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 (“MNPI”) about the acquisition and provided it to CRONIN so that CRONIN could profitably trade in securities.
In turn, CRONIN, who, at the time, was a police sergeant in Dighton, Massachusetts, and went on to become the police chief, provided another friend with the MNPI about Portola’s pending acquisition, both so that that friend could trade in advance of the acquisition and so that that friend would assist 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 tipped at least five additional individuals who traded on the tip.
After Alexion’s acquisition of Portola was publicly announced on 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.
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CRONIN, 44, of Dighton, Massachusetts, and FELDMAN, 49, of Poughquag, New York, each pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. CRONIN and FELDMAN will be sentenced by U.S. District Judge Gregory H. Woods on May 13, 2024.
Mr. Williams praised the outstanding work of the Federal Bureau of Investigation. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Margaret Graham, Sarah Mortazavi, and Samuel P. Rothschild are in charge of the prosecution.
Nicholas Biase, Lauren Scarff