Medtronic insider trading case ends in 1 criminal conviction, 1 acquittal
A federal jury has issued its rulings in the criminal cases of two people accused of participating in an insider trading scheme centered around healthcare device company Medtronic, finding a former Medtronic consultant guilty while acquitting another man.
Doron “Ron” Tavlin, 68, the consultant, was found to have learned nonpublic information about Medtronic’s $1.6 billion acquisition of Mazer Robotics, where he served as VP of business development prior to the acquisition, in 2018. Tavlin then relayed that info to a friend, Afshin “Alex” Farahan, 57, who bought a total of more than $1 million in Mazor stock across August and September 2018 in anticipation of a share price jump post-acquisition.
Farahan was also accused of passing this information on to a friend, a third alleged co-conspirator named David Gantman, 58, who also purchased Mazor stock ahead of the acquisition. Farahan and Gantman netted a combined profit of more than $500,000 from their stock purchases, according to prosecutors.
The same jury heard both Tavlin and Gantman’s cases, finding Tavlin guilty of one count of conspiracy to commit insider trading, and 10 counts of securities fraud and aiding and abetting securities fraud. Gantman, however, was found not guilty of all seven charges against him, successfully arguing he made his own decisions based on other public knowledge about a product partnership between Medtronic and Mazor separate from the impending buyout, according to the Star Tribune.
Aside from the suspicious timing of the stock purchases, federal investigators showed evidence that there was an agreement between Tavlin and Farahan in which the latter would pay back the former for the information he received. In October 2019, Farahan gave Tavlin a $25,000 check for this purpose, according to officials. Additionally, during the investigation, Tavelin falsely denied recognizing Farahan’s name on a list of parties who traded in Mazor stock prior to public announcement of the acquisition.
Farahan had already pleaded guilty in August 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, according to the U.S. Attorney’s Office for the District of Minnesota.
Evan joined TriMed in 2011, writing primarily for Health Imaging. Prior to diving into medical journalism, Evan worked for the Nine Network of Public Media in St. Louis. He also has worked in public relations and education. Evan studied journalism at the University of Missouri, with an emphasis on broadcast media.