The Wall Street Journal-20080123-Ex-Chairman of Chip Maker Raza Will Pay a Fine in SEC Settlement
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Ex-Chairman of Chip Maker Raza Will Pay a Fine in SEC Settlement
The former chairman of Silicon Valley communications chip maker Raza Microelectronics Inc. agreed to pay nearly $3 million as a part of a settlement on insider-trading charges, the Securities and Exchange Commission said.
The charges against Saiyed Atiq Raza, 58 years old, a former president and chief operating officer of chip maker Advanced Micro Devices Inc., stemmed from trades he made in 2006 while serving as a director of San Francisco orthodontic device maker OrthoClear Holdings Inc.
Under terms of the settlement, Mr. Raza neither admitted nor denied allegations that he unlawfully netted nearly $1.5 million by trading on confidential company information.
Mr. Raza was also barred from serving as an officer or director of a public company for five years, and he was permanently enjoined from future violations of the federal securities laws. Officials at Raza Microelectronics, which makes chips for telecommunications switches and network routers, were not immediately available to comment on the settlement.
The SEC alleged that Mr. Raza in September 2006 was informed by OrthoClear's chief executive that the company had agreed to cease competing with rival Align Technology Inc., of Santa Clara, Calif. The agreement, which effectively put OrthoClear out of business, followed a long-running intellectual-property rights dispute between the transparent teeth-aligner market competitors.
According to the SEC, Mr. Raza within two days of learning about the settlement began making large purchases of Align call options -- which would increase in value if the company's share price rose -- before the litigation settlement agreement became public. When the OrthoClear settlement was publicly announced several days later, the price of Align stock shot up 48% and Mr. Raza netted a profit of $1,450,900, the SEC said.
