Doron “Ron” Tavlin, former vice president of business development at Mazor Robotics, was recently convicted for his involvement in an insider trading conspiracy involving nonpublic negotiations. According to evidence presented at his trial, Tavlin learned of material, non-public information about Medtronic, Inc.’s possible acquisition of his company, Mazor Robotics.
Tavlin provided this information to his friend, Afshin Farahan, and told him to keep the information secret. Farahan knew that the acquisition of Mazor by Medtronic would likely result in an increase to Mazor’s stock price and therefore used the non-public information to quickly purchase more than $1 million of Mazor stock in August and September 2018. Then, on September 21, 2018, the morning after the acquisition was announced, Farahan sold all the stock he had purchased in recent weeks, resulting in a combined profit of more than $500,000 for himself and one other individual (discussed below).
After Mazor was acquired by Medtronic, Tavlin learned that the Financial Industry Regulatory Authority (FINRA) was investigating trades of Mazor securities that were made prior to the publicly announced acquisition. Through that inquiry, FINRA asked Tavlin (and others) whether he knew any of the parties who traded in Mazor securities leading up to the public acquisition announcement. In January 2019, Tavlin responded by falsely saying he did not recognize any names on the list of persons who had purchased Mazor securities – including Farahan.
Evidence presented at trial showed an agreement between Tavlin and Farahan that Farahan would pay Tavlin in exchange for the non-public information. In October 2019, Farahan gave $25,000 to Tavlin, in exchange for the information Tavlin provided about Mazor prior to the acquisition.
Following a nine-day trial before United States District Judge Donovan W. Frank, Tavlin was found guilty on one count of conspiracy to commit insider trading and ten counts of securities fraud and aiding and abetting securities fraud. Farahan previously pled guilty to one count of conspiracy to engage in insider trading. Sentencing for both Tavlin and Farahan will take place at some point in the future.
Third Individual – Not Found Guilty
A third individual was involved as well, David Gantman. Gantman allegedly received the information from Farahan regarding the planned acquisition of Mazor and purchased substantial amounts of Mazor stock in anticipation of the acquisition. Gantman also allegedly sold all of his Mazor stock on September 21, 2018, and saw a profit from his actions. He was found not guilty on one count of conspiracy to commit insider trading and six counts of securities fraud.