Doron Tavlin, a former vice president of Mazor Robotics, was convicted by a federal jury for insider trading ahead of Mazor's acquisition by medical device company Medtronic.
In 2018, Medtronic finalized the $1.6 billion acquisition of Mazor Robotics after making a series of investments over the span of two years.
Mr. Tavlin is accused of engaging in an insider trading conspiracy with Afshin Farahan from 2018 to August 2020, according to a Feb. 20 press release from the Justice Department.
While working as vice president of business development at Mazor Robotics, Mr. Tavlin learned material, nonpublic information about Medtronic's potential acquisition of his company.
Mr. Tavlin provided this information about the acquisition to his friend Mr. Farahan and instructed him to keep the information secret. Mr. Farahan then purchased more than $1 million worth of Mazor stock between August and September of 2018, knowing the acquisition would probably drive up prices.
The morning after the acquisition, Mr. Farahan sold off the stock, earning $500,000 in profit for himself and another individual.
After the acquisition, the Financial Industry Regulatory Authority was investigating certain trades of Mazor securities that occurred prior to the publicly announced acquisition. FINRA asked Mr. Tavlin, and others who knew about the negotiations, whether they knew any of the parties who traded in Mazor securities leading up to the public announcement.
In January 2019, Mr. Tavlin denied that he recognized any names on a list of persons and entities that purchased Mazor securities, which included Mr. Farahan.
The conspiracy included an agreement between Mr. Tavlin and Mr. Farahan that Mr. Tavlin would receive compensation for material, nonpublic information, according to evidence presented at the trial. In one instance, Mr. Farahan gave Mr. Tavlin a $25,000 check in exchange for the information that Mr. Tavlin had provided about Mazor Robotics leading up to the acquisition.
On Feb. 16, Mr. Tavlin was found guilty on one count of conspiracy to commit insider trading and 10 counts of securities fraud and aiding and abetting securities fraud. Another defendant, David Jay Gantman, was found not guilty on one count of conspiracy to commit insider trading and six counts of securities fraud. Mr. Farahan pleaded guilty on August 4, 2022, to one count of conspiracy to engage in insider trading.
Becker's has reached out to Medtronic for comment.