MN Man Convicted Of Insider Trading During Medtronic-Mazor Acquisition

ST. PAUL, MN — A federal jury agreed to convict a Minneapolis man in an insider trading conspiracy, U.S. Attorney Ann M. Bildtsen announced Tuesday.

The case involved nonpublic negotiations for Medtronic's acquisition of Mazor Robotics, a medical device company valued at $1.6 billion, authorities said.

On Feb. 16, following a nine-day trial, Doron Tavlin, 68, of Minneapolis was found guilty of one count of conspiracy to commit insider trading and ten counts of securities fraud and aiding and abetting securities fraud.

Co-defendent Afshin Farahan, 57, of Los Angeles pleaded guilty on Aug. 4, 2022, to one count of conspiracy to engage in insider trading.

Sentencing hearings for both Tavlin and Farahan will be scheduled at a later time.

A third defendant, David Jay Gantman, 58, of Mendota Heights, was found not guilty this month on one count of conspiracy to commit insider trading and six counts of securities fraud.

According to evidence presented at trial, Tavlin and Farahan engaged in an insider trading conspiracy from January 2018 through August 2020.

Tavlin was the vice president of business development at Israeli-based Mazor Robotics, which specializes in robotics for spinal procedures. In this position, Tavlin knew about Medtronic’s potential acquisition of his company, according to investigators.

Medtronic, technically an Ireland-based medical device company, primarily operates from its executive headquarters in Minneapolis.

Tavlin illegally tipped information of the potential sale acquisition to his friend, Farahan, and instructed him to keep the information secret, prosecutors said at trial.

Farahan knew that Medtronic’s imminent acquisition of Mazor would likely increase Mazor’s stock price and as a result, bought more than $1 million of Mazor stock throughout August and September 2018, according to investigators.

The morning after the acquisition was announced, on Sept. 21, Farahan immediately sold all the stock he purchased over the preceding weeks, netting a profit of $500,000, authorities said.

A month later, Farahan gave Tavlin a $25,000 check in exchange for the insider information, authorities said.

Around that time, the Financial Industry Regulatory Authority (FINRA) investigating certain trades of Mazor securities that occurred before the publicly announced acquisition.

FINRA asked Tavlin and other insiders who knew about the secret acquisition negotiations, whether he knew any of the parties who traded in Mazor securities leading up to the public announcement, according to investigators.

In January 2019, Tavlin lied to FINRA, saying he did not recognize any names on a list of persons and entities that purchased Mazor securities, which included Farahan, prosecutors said at trial.