Minneapolis Man Sentenced to Prison for Insider Trading Scheme

ST. PAUL, Minn. – A Minneapolis man has been sentenced to 18 months in federal prison, followed by two years of supervised release, and 320 hours of community service for an insider trading conspiracy involving nonpublic negotiations for the acquisition of a medical device company valued at $1.6 billion, announced First Assistant U.S. Attorney Lisa D. Kirkpatrick.

According to evidence presented at trial, beginning in January 2018 through at least August 2020, Doron “Ron” Tavlin, 69, of Minneapolis, and Afshin “Alex” Farahan, 58, of Los Angeles, engaged in an insider trading conspiracy. The conspiracy involved nonpublic information about the acquisition of Mazor Robotics, an Israeli-based company that specialized in robotics for spinal procedures, by Medtronic, Inc., an Ireland-based medical device company that primarily operated from its executive headquarters in Minneapolis. Tavlin, while working as vice president of business development at Mazor Robotics, learned material, nonpublic information about Medtronic’s impending acquisition of his company. In violation of federal law and his duty to his former employer, Mazor Robotics, Tavlin tipped this information about the acquisition to his friend, Farahan, and instructed him to buy shares in the company. Tavlin and Farahan knew that Medtronic’s imminent acquisition of Mazor would likely result in an increase in Mazor’s stock price. Farahan used the nonpublic information tipped by Tavlin to quickly buy more than $1 million of Mazor stock throughout August and September 2018. The morning after the secret acquisition was publicly announced, Farahan immediately sold all the stock he had purchased over the preceding weeks based on Tavlin’s illegal tip, which resulted in a profit of over $246,000. According to evidence presented at trial, after the acquisition occurred, Tavlin learned that the Financial Industry Regulatory Authority (FINRA) was investigating certain trades of Mazor securities that occurred prior to the publicly announced acquisition. As part of its inquiry, FINRA asked Tavlin, and other insiders who knew about the secret acquisition negotiations, whether he knew any of the parties who traded in Mazor securities leading up to the public announcement. In January 2019, Tavlin responded to FINRA’s inquiry by falsely denying that he recognized any names on a list of persons and entities that purchased Mazor securities, which included Farahan.

According to evidence presented at trial, the insider trading conspiracy included an agreement between Tavlin and Farahan that Farahan would pay money to Tavlin in exchange for the material, nonpublic information.

On February 16, 2024, 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 following a nine-day trial. He was sentenced yesterday in U.S. District Court by Judge Donovan W. Frank.

Farahan pleaded guilty on August 4, 2022, to one count of conspiracy to engage in insider trading. His sentencing hearing will be scheduled at a later time.

This case is the result of an investigation conducted by the FBI.

Assistant U.S. Attorneys Matthew S. Ebert, Robert M. Lewis, and William C. Mattessich prosecuted the case.