Dive Brief:
- A federal jury has convicted a former medtech executive in an insider trading conspiracy linked to Medtronic’s $1.6 billion acquisition of Mazor Robotics, the U.S. Attorney’s Office for the District of Minnesota said Tuesday.
- The defendant, Doron Tavlin, was vice president of business development at Mazor when Medtronic stuck a deal to buy the company in 2018. According to the prosecution, Tavlin gave a friend nonpublic information about the upcoming deal.
- After a nine-day trial, a federal jury found Tavlin guilty on one count of conspiracy to commit insider trading and 10 counts related to securities fraud. Tavlin is yet to be sentenced.
Dive Insight:
Tavlin and two other people were indicted for insider trading and securities fraud in July 2022. The U.S. Securities and Exchange Commission charged Tavlin and the other two men with unlawful insider trading in a civil case at the same time.
One of the indicted men, Afshin Farahan, pleaded guilty to one count of conspiracy to engage in insider trading in August 2022. The other two people went to trial, where the jury found David Jay Gantman not guilty on one count of conspiracy to commit insider trading and six counts of securities fraud, but found the ex-Mazor executive Tavlin guilty on multiple counts.
Tavlin was present at meetings with Medtronic to discuss a potential acquisition in January 2018, Mazor told shareholders in a financial regulatory filing about the timeline of the talks. The prosecution accused Tavlin, who worked as a consultant for Medtronic before joining Mazor in 2017, of providing details of the proposed acquisition to Farahan and telling him to keep the information secret.
Farahan bought more than $1 million of Mazor stock throughout August and September 2018, according to the prosecution, and sold the stock for a $500,000 profit the morning after the acquisition was announced. The two men were accused of agreeing to trade information for money. In October 2019, Farahan allegedly gave Tavlin a $25,000 check in exchange for information about the Mazor-Medtronic deal.
Sentencing hearings for both defendants will be scheduled at a later time.