Two Individuals, Including A Former Pharmaceutical Executive, Plead Guilty To Participating In Insider Trading Scheme Surrounding Alexion Pharmaceuticals’ Acquisition Of Portola Pharmaceuticals

Damian Williams, the United States Attorney for the Southern District of New York, announced today that, on September 15, 2023, JOSEPH DUPONT pled guilty to one count of securities fraud, and earlier today, SLAVA KAPLAN, a/k/a “Stanley Kaplan,” pled guilty to one count of securities fraud, both in connection with their participation in an insider trading scheme surrounding the announcement of Alexion Pharmaceuticals, Inc.’s acquisition of Portola Pharmaceuticals, Inc.  DUPONT and KAPLAN were arrested in June of this year and pled guilty before U.S. District Judge Gregory H. Woods.

U.S. Attorney Damian Williams said: “Dupont admitted in court that he gave his friend sensitive information that Dupont had misappropriated from his employer at the time so that his friend could profit.  And Kaplan admitted in court both that he made profitable trades based on information that he knew was provided to him for an illegitimate purpose, and that he passed that information along to others.  These convictions reflect my Office’s ongoing commitment to ensuring fairness in the stock market.”

According to the allegations in the Indictment and statements made in public court proceedings:

In 2020, DUPONT, KAPLAN, and others engaged in an insider trading scheme surrounding the announcement of Alexion’s acquisition of Portola.  DUPONT was a vice president at Alexion and, on January 31, 2020, was informed of Alexion’s upcoming acquisition of Portola.  Before that acquisition was publicly announced, in April 2020, DUPONT provided material nonpublic information (“MNPI”) that he misappropriated from Alexion about the acquisition to a friend so that the friend could use the information to trade profitably in securities.

In turn, DUPONT’s friend provided KAPLAN, who was also known to DUPONT, the MNPI about Portola’s pending acquisition, both so that KAPLAN could trade in advance of the acquisition and so that KAPLAN would assist DUPONT’s friend in formulating trading strategies to maximize DUPONT’s friend’s own trading profits.  KAPLAN further shared MNPI about the upcoming acquisition with a family member and a friend and colleague.  After Alexion’s acquisition of Portola was publicly announced on the morning of May 5, 2020, causing Portola’s stock price to increase significantly, KAPLAN and others who had purchased shares and options based on DUPONT’s inside information sold their shares of Portola and call options for Portola stock, reaping millions of dollars of illegally obtained trading profits.

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DUPONT, 44, of Rehoboth, Massachusetts, and KAPLAN, 45, of Hopewell Junction, 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.  DUPONT and KAPLAN are scheduled to be sentenced by Judge Woods on January 5, 2024, at 1:00 p.m. and 3:00 p.m., respectively.

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.