The Securities and Exchange Commission is suing a Minneapolis business executive and two friends for insider trading related to Medtronic’s 2018 acquisition of the Israeli robotics firm.
Doron Tavlin, 67, was vice president of business development for Mazor Robotics when he was involved in discussions about a potential acquisition of the company by Medtronic, according to a complaint filed Wednesday in US District Court in Minnesota.
The complaint alleges that in August 2018, Tavlin was hosting a California friend, 55-year-old Afshir Farhan, at his Minneapolis home when Tavlin told Farhan about a possible takeover.
Tavlin told Farhan that Major was about to be acquired, that Farhan should buy shares quickly, and that the information was confidential. Tavlin told Farhan that he could be fired for giving this information to Farhan. Tavlin also asked Farhan to invest in Mazor on Tavlin’s behalf,” the SEC alleges.
During the same visit, Farhan was discussing stock at his luxury rug store in Bloomington with a mutual friend, David Gantman, a 56-year-old insurance agent and benefits consultant for Mendota Heights, when Farhan disclosed information he had received from Tavlin. complaint allegation.
Over the next four weeks, Farhan bought a total of $1.031 million in Mazor stock between his personal and business accounts.
Meanwhile, Gantman bought $214,000 in major stock and $73,000 in call options, a risky form of investment that had the potential to generate very high returns when the share price rose.
In September 2018, the day after Farhan’s last purchase, Mazor announced that it would be sold to Medtronic, and the company’s share price soared more than 10 percent.
The next day, Farhan sold all of his Mazor shares at a profit of $247,500, and Gantman earned $255,600 by selling all of his Mazor securities.
Denial, kickback allegation
The following month, the Financial Industry Regulatory Authority contacted Mazor as part of an investigation into trades made before the company’s sale was announced.
Tavlin was shown a list of merchants that included both Farhan and Gantman and denied that he knew anyone on it; That same day, Tavlin spoke to Farhan over the phone and sent him the merchant list, which Farhan informed Gantham, the SEC alleges.
A year later, the SEC says, Farhan handed Tavlin a $25,000 check during breakfast in Minnesota as a kickback for an investment tip.
Gantman also denied to FINRA investigators that he knew Tavlin, although Gantman described another person to Tavlin as a friend, according to the complaint in a December 2017 email.
The SEC has asked a judge to force the three men to forfeit money they made on stock purchases, as well as interest and penalties.
The court file does not list an attorney for the defendants.
