Litigation: SEC Obtains Judgments Against 3 Defendants for Insider Trading Prior to Pharmaceutical Merger

Targeted News Service

WASHINGTON, Nov. 29 -- The Securities and Exchange Commission issued the following litigation release (No. 1:23-cv-05565; S.D.N.Y. filed June 29, 2023) involving Joseph M. Dupont et al.:

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On November 27, 2023, the Honorable Vincent Marrero of the United States District Court for the Southern District of New York entered judgments by consent against defendants Joseph M. Dupont and Stanley Kaplan, who were each charged with insider trading in the securities of Portola Pharmaceuticals Inc. Previously, on August 9, 2023, Judge Marrero entered a consent judgment against defendant Jarett G. Mendoza, who was also charged with insider trading Portola securities.

The SEC's complaint, filed on June 29, 2023, alleges that Dupont was a vice president at Alexion Pharmaceuticals Inc. when he knowingly or recklessly tipped confidential information to a close friend about an anticipated May 2020 announcement of a tender offer by Alexion to acquire Portola. According to the SEC's complaint, the close friend traded on that information and then passed the information to Kaplan and Mendoza, who also profitably traded. On the day of the acquisition announcement, Portola's stock price increased more than 130 percent.

On September 15, 2023, and September 19, 2023, respectively, Dupont and Kaplan pled guilty to federal criminal charges for securities fraud in a parallel criminal action before the District Court for the Southern District of New York in United States v. Joseph Dupont et al., 23-cr-00320. Previously, on June 28, 2023, Mendoza pled guilty to securities fraud and related charges in United States v. Jarett Mendoza, 23-cr-00316.

Dupont, Kaplan, and Mendoza each consented to judgments enjoining them from violating Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. In addition, each was barred from serving as an officer or director of a public company. The district court will determine monetary remedies, if any, against these defendants at a later date. The SEC's litigation is continuing as to the remaining defendants.

The SEC's ongoing investigation is being conducted by Margaret Spillane, Matthew Lambert, and Alison Conn of the New York Regional Office under the supervision of Thomas P. Smith, Jr. The litigation is being led by Ms. Spillane.