United States v. Tavlin
0:22-cr-00134
D. MinnesotaAug 23, 2024Background
- Doron Tavlin was charged with conspiracy to engage in insider trading and ten counts of securities fraud, along with two co-defendants; only Tavlin was convicted on all counts.
- Tavlin moved for judgment of acquittal and, alternatively, for a new trial following his conviction at jury trial.
- The charges stemmed from Tavlin allegedly providing material, nonpublic information about a potential acquisition to Afshin Farahan, who traded on it, and to David Gantman, who was acquitted.
- Tavlin argued that he did not intend for Farahan to trade on the confidential information and that there was insufficient evidence to support conviction or to show a unified conspiracy.
- The court analyzed whether there was a prejudicial variance between indictment and proof, potential merger of conspiracy and substantive offenses (Wharton’s Rule), sufficiency of evidence on materiality and public nature of the information, and alleged prosecutorial misconduct.
- Motions were denied; the court found the instructions adequate, variance not prejudicial, evidence sufficient, and no basis for a new trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Evidence (Conspiracy) | Evidence supported a single conspiracy among Tavlin, Farahan, and Gantman | No sufficient evidence Tavlin intended or foresaw Gantman’s trading; no single conspiracy | Variance existed but was harmless error; no prejudice to Tavlin |
| Sufficiency of Evidence (Material Nonpublic Info) | Info was confidential, material, and not public; trial evidence sufficed | Info was speculative and public; Gov’t needed event study | Evidence sufficient; merger deal details were material and nonpublic |
| Jury Instructions | Instructions communicated law and elements accurately | Requested more detailed theory of defense and duty of trust instructions | Instructions adequate; defense theory conveyed; no prejudice |
| Prosecutorial Misconduct | No misconduct or prejudice | Misstated law in closing, referenced guilty plea, allowed inconsistent testimony | No misconduct warranting new trial; any errors not prejudicial |
Key Cases Cited
- United States v. Geibel, 369 F.3d 682 (2d Cir. 2004) (addressing proof standards for single conspiracy in insider trading context)
- United States v. McDermott, 277 F.3d 240 (2d Cir. 2002) (harmless error rule applies to variance in conspiracy charges)
- Iannelli v. United States, 420 U.S. 770 (1975) (Wharton’s Rule application to substantive and conspiracy offenses)
- United States v. Rajaratnam, 802 F. Supp. 2d 491 (S.D.N.Y. 2011) (standard for materiality of nonpublic information)
- United States v. Rice, 449 F.3d 887 (8th Cir. 2006) (jury instructions adequate if essential elements and burden are properly stated)
- United States v. O’Hagan, 521 U.S. 642 (1997) (insider trading law protects market integrity)