SAN JOSE (CN) – The SEC accuses OrthoClear Holdings director Saiyed Atiq Raza of using inside information about a legal settlement with its primary competitor, Align Technology, to buy Align stock ahead of the public announcement, unjustly reaping nearly $1.5 million.
OrthoClear Holding’s CEO called Raza and other company directors on Sept. 19 and 20, 2006 to let them know the company had agreed to stop doing business in the transparent teeth aligner market in return for a $20 million payment from Align, the suit states.
Acting on that information, Raza allegedly bought 3,500 Align call options on Sept. 22, before the public announcement. Align’s stock price rose by 48 percent by the close of trading on Sept. 28, the day Align announced the settlement. Raza netted $1.45 million from his illegal trades, the SEC says.
The SEC wants Raza to disgorge his profits, barred from serving as an officer or director of any publicly traded company, and fined. See complaint.