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SAN FRANCISCO � The U.S. Securities and Exchange Commission last week took a $3 million bite out of a former board member of a dental products maker for insider trading. Align Technology Inc. and OrthoClear Inc., rivals in the market for tooth straighteners, settled a bitter intellectual property fight in 2006, with an agreement that put a smile on Align’s face � OrthoClear would go out of business. Align’s stock rose by nearly 50% on the news. OrthoClear board member Saiyed Atiq Raza profited from his company’s demise, pocketing $1.5 million after buying up piles of Align stock and options ahead of the settlement announcement, according to the SEC. Raza � who once served as president, chief operating officer and board member at Advanced Micro Devices Inc. (AMD) � was charged with insider trading last week by the SEC’s San Francisco office. Raza agreed to settle by paying nearly $3 million to cover a fine and disgorgement of his trading profits. He is also barred from being a director or officer at a public company for the next five years. SEC’s new focus White-collar and securities lawyers said the case offers more proof that insider trading is to be the SEC’s new focus. But they also said that the case was unusual because board members with experience at public companies don’t usually run afoul of trading rules. “There are not that many cases where board members or executives are the ones trading,” said Jahan Raissi, who co-heads San Francisco-based Shartsis Friese’s securities defense group. “The typical Silicon Valley case is someone lower down in the company.” Aside from AMD, Raza also served on the boards at Mellanox Technologies Inc. and AMI Semiconductor Inc., but resigned from those posts after the SEC investigation started. In November 2007, he stepped down as president and CEO of Raza Microelectronics Inc., a private company he founded in Cupertino, Calif. SEC lawyers said they were first tipped off when Raza bought a large volume of Align stock and options in the days before the announcement of the settlement, which required OrthoClear to turn over its intellectual property and shut down in exchange for $20 million. According to the SEC complaint, Raza bought 3,500 call options, which accounted for 45% of the total Align options trading that day, as well as 60,000 shares after OrthoClear’s CEO told him about the settlement. Foley & Lardner’s Thomas Carlucci, who was retained by Raza, said that the former AMD president didn’t know the rules when he made the trades.

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