The Israel Securities Authority is investigating the CEO of Mazor Robotics concerning accusations of insider trading, according to a report in Calcalist, an Israel-based publication. The probe is connected to a May 2016 distribution agreement with Medtronic, according to the report, which cites documents reviewed by Calcalist.
Caesarea, Israel-based Mazor gave Medtronic U.S. distribution rights for its spinal surgery systems. Earlier this year, Mazor gave Medtronic worldwide distribution of the systems and agreed to pay Mazor $40 million, bringing its overall investment to $74 million.
In August, after the companies entered the second phase of their partnership, Hadomi said the partnership had already resulted in 59 Mazor X orders since the system was launched in October 2016, which he said reflected an accelerated sales cycle due to customers' eagerness to adopt the technology for the spine market.
The Israel Securities Authority reportedly raided Mazor's offices in May and questioned senior executives following a suspicion that information regarding the deal was leaked to close associates before it was made public. That prompted those associates to buy Mazor securities, and in June Mazor disclosed the investigation to investors. Now it is reported that Hadomi is among the executives being considered as a suspect. The report said Hadomi's home was searched and his cell phone was confiscated.
The investigation could be at least partially responsible for a 3.63% ($2.10) drop in Mazor's stock on Monday.
MDDI reached out to Mazor for comment on this matter and will update the story when the company responds.