A Minneapolis businessman and two others face federal criminal charges and a lawsuit from financial regulators in connection with an alleged insider trading conspiracy.
On Thursday, federal prosecutors in Minnesota announced three men had been indicted on multiple charges related to insider trading and securities fraud surrounding securities trades coinciding with the Medtronic acquisition of Israel-based Mazor Robotics in 2018.
Authorities say Doron Tavlin, 66, of Minneapolis, shared nonpublic information about the pending acquisition with his friend, David Gantman, 56, of Mendota Heights. Gantman, authorities allege, then passed the illegal tip to his friend, Afshin Farahan, 55, of Los Angeles.
Tavlin is a former Medtronic consultant, according to the Star Tribune.
According to federal authorities, Gantman and Farahan acted on the illegal tip and purchased Mazor Robotics' securities throughout August and September of 2018, knowing the acquisition would substantially increase the company's stock price.
The day after Medtronic announced the acquisition, Farahan and Gantman each sold all of their securities for $500,000 in profits.
The next month, prosecutors allege, Tavlin learned that the Financial Industry Regulatory Authority (FINRA) was investigating securities trades that occurred prior to the public announcement of the acquisition.
Prosecutors allege Tavlin lied during FINRA's inquiry and denied recognizing any names on a list of people who purchased the company's securities, including Farahan and Gantman.
Authorities also allege Farahan had agreed to pay a kickback to Tavlin in exchange for the illegal tip. The month after the acquisition, for example, Farahan wrote Tavlin a check for $25,000.